European Gaming Labor Group Backs Microsoft’s Activision-Blizzard Deal

The European Games Developer Federation, a labor organization representing game developers across Europe, has put its weight behind Microsoft’s proposed acquisition of Activision Blizzard.

The EGDF says it “supports Microsoft’s Activision-Blizzard acquisition, as its potential positive impacts on the competition in-game markets, in general, outweigh the limited console and subscription market-specific competition concerns.”

This comes after EU regulators warned Microsoft they could face an anti-trust probe over allegations that the tech giant could engage in anti-competitive behavior if the deal were to close. 

The EGDF represents game developers in 21 European countries. 2,500 companies are members of the EGDF, which represent 40,000 employees, making it one of the largest gaming labor organizations in the world. 

While the endorsement is no longer on the website of the EGDF, a statement was posted on Resetera and reposted by industry analyst Idle Sloth:

https://twitter.com/IdleSloth84_/status/1615341886901829632

EGDF supports Microsoft’s ActivisionBlizzard acquisition, as its potential positive impacts on the competition in game markets, in general, outweigh the limited console and subscription market-specific competition concerns. Furthermore, in the console game markets, Sony is a clear market leader with its Playstation platform, and Microsoft is still in a challenger position.

Microsoft’s Activision Blizzard acquisition strengthens the competition benefits for global game markets. EGDF supports fair and sustainable competition in game markets. In particular, EGDF has been concerned about the recent consolidation of the global games industry. The more there are equally strong competing market players, the better for European game developers” – EGDF

The EGDF welcomes the acquisition of Activision-Blizzard but encourages the European Commission to fully investigate the matter. The statement notes that Microsoft is still the underdog compared to Sony, noting that the latter has more market share. 

The statement also brings up Europe’s new Digital Markets Act and how Microsoft can use it to increase competition, noting that “Microsoft has been among the first to announce that it will fully explore the competition-enhancing market possibilities of the recently approved Digital Markets Act (DMA) by launching its own independent application stores on both Apple’s and Google’s platforms.“

The Digital Markets Act is a new law in the EU requiring Apple and Google to allow sideloading of apps, including App stores not within the Apple/Google ecosystem. The DMA has the potential to make cloud gaming on mobile devices more competitive in Europe and is something Microsoft can take advantage of. 

The EGDF argues that Microsoft will be able to increase competition with Apple and Google once the DMA is enacted, and it can further expand its services to mobile devices. Apple currently bans monetization done outside of its ecosystem, meaning all transactions on apps must go through the Apple store and pay a 30% fee. 

The biggest concern from regulators around the world is that Microsoft could close off some games from other platforms and make them exclusive. This is what was done with Redfall and Starfield when Bethesda was acquired by Microsoft.

Activision Blizzard is a large company, and its proposed acquisition isn’t just the largest acquisition within gaming; it is one of the largest M&A deals ever proposed.

The worry is that Microsoft could pull popular titles such as Call of Duty from competing platforms. Microsoft has a history of doing so and is being looked at closely by regulators. 

The EGDF also calls on Microsoft to continue to support competition by doing the following:

• Continue its work to make all of its platforms more open and transparent, particularly by widening its app store principles to cover Xbox.
• Continue to allow also controversial cultural and artistic content on all its platforms.
•  Continue to allow Web3 games on its platforms, as they might be the game changer helping new European platforms to emerge.
•  Continue its investment in small and medium-sized game developer studios, securing more diverse content on its platforms.
• Continue its investment in cross-platform game development and make its games widely available on all platforms.
•  Securing game developers and publishers the same access to personal and non-personal data on their games as Microsoft has on all its platforms.
• Break the console market triopoly and compete on content by lowering its 30% platform fee on Xbox.
•  Continue the close dialogue with European game developers on improving its platforms and application stores.

The endorsement of the EGDF gives weight to Microsoft’s proposed acquisition and gives the tech giants arguments legs to stand on in Europe. The deal can only close after it is approved by regulators around the world. The EU will make a final decision sometime in April.