Microsoft CEO: Small Market Share In Japan Shows Activision Deal Won’t Hurt Competition

It’s been more than a year since the news of Microsoft acquiring Activision Blizzard broke out. Since then, it has been making headlines almost every week. From different regulators trying to block the $69 billion deal to even the European Union warning Microsoft, it has been all the rage in the gaming world.

Amidst all of these hurdles, Microsoft CEO Satya Nadella has said that regulators should look at the performance of Xbox in Japan. Microsoft has a small market share in the market and hence they should wonder why that is so. The deal won’t destroy competition, it is actually needed as Xbox isn’t that big according to Nadella.

Back in January 2022, Microsoft shook not only the gaming industry but the whole world with a single move. It acquired Activision and Blizzard Entertainment in a deal worth $69 billion. However, it has been over a year and we still don’t know if the deal will get approval and go through.

Activision Blizzard shareholders approved the deal back in April and Satya Nadella was confident the deal would go through. But, the last few months have presented one hurdle after another for the ground-breaking deal. Sony has been against the deal and has said it will give the company an unfair advantage, which hasn’t helped.

Even though the FTC vote was in Microsoft’s favor, the regulator is suing to stop the deal from happening. The approval rate has been split and now a new development has put the acquisition’s completion in doubt. According to reports, the UK will block the deal even though the European Gaming Labor Group is backing it.

Bobby Kotick did hit back at this new development but the deal will not go through if the UK doesn’t accept it. Microsoft CEO Satya Nadella gave his opinion on the industry and the Activision Blizzard acquisition. In an interview with CNBC, the CEO said he will only submit to the regulators if they were right about the competition.

He said that regulators should pay attention to the share of Microsoft in the console market in Japan. Nadella went on to say that the company has a small share of the country’s console industry. And, regulators should wonder why that is and how Microsoft needs to compete for more.

Then even if you look at the console market, you should probably look at the Microsoft share of the console market in Japan. Prehaps a question somebody should ask is ‘wow i wonder what that is so small’ and maybe they should actually start competing more.”

So, the acquisition of Activision Blizzard won’t hurt the wider industry competition because Microsoft is behind. You can’t say Satya Nadella is wrong because Xbox consoles or games don’t sell really well in Japan. It is one of the biggest gaming markets in the world, and Sony alongside Nintendo dominates it every year.

As a result, Microsoft is lacking in the home base of the industry’s giants, while both of them compete well in the US. Hence, Nadella thinks this deal is necessary to bring more competition to the industry. Xbox is trailing the other two companies in the big three, and this will level the playing field near him.

Satya talks Activision/Blizzard Acquisition

He says regulators should look at the broader industry to check competition & market share

There are people who make more money in gaming who don't even build games today

We should look at MS shares of the console market in Japan pic.twitter.com/t7IvpSzLN8

— Alan Feely (@IdleSloth84_) February 7, 2023

Everybody has a different opinion on if this is bad for the industry and too much of an advantage. But, Satya Nadella certainly thinks the wider gaming sphere needs better competition. And, Xbox buying Activision Blizzard will provide exactly that instead of destroying it for companies like Sony.

Of course, Sony, the UK CMA, and even Nvidia and Google don’t see it this way. Nadella hopes that the regulators make a decision that is beneficial for gamers, publishers, and the industry as a whole.

So I hope the regulators take an approach that is going to truly be beneficial for gamers, all publishers.”

Only time will tell what happens at the end of the Microsoft-Activision deal. But, whatever it is, hopefully, it is good for gamers and developers.