Tuesday, January 17, 2023

European Games Developer Federation supports Microsoft's purchase of Activision Blizzard: position paper is as authentic as it gets

In these times where self-declared app developer associations are often just astroturfers on the payroll of the likes of Apple, it is reassuring that genuine developer representatives still exist and speak out on the issues.

Yesterday, Jari-Pekka Kaleva, the managing director of the European Games Developer Federation (EGDF), published a summary of his organization's observations on Microsoft's acquisition of Activision Blizzard King (NASDAQ:ATVI). The blog post links to a December 23 three-page PDF document on the same subject.

The EGDF credibly claims to represent, through its 23 member associations that are national trade groups, more than 2,500 of approximatley 5,000 game developer studios in 22 European countries. The EGDF's German member is GAME, which organizes "the world's largest games event": gamescom.

My first observation on the EGDF's observations is that they're perfectly independent from Microsoft. One cannot conclude otherwise: the statement, while ultimately supportive of the transaction in question, says things that Microsoft undoubtedly disagrees with. The EGDF "acknowledges that Microsoft has the ability for anti-competitive market behaviour and has not in the past consistently respected assurances it has given to continue making games published by companies that it has acquired available on rival platforms." The second part must relate to the ZeniMax (Bethesda) acquisition, and to the best of my knowledge, no promises were broken there. Also, the EGDF calls on Microsoft to "compete on content by lowering its 30% platform fee on [its] Xbox."

Furthermore, the EGDF's position paper "calls upon the European Commission" to closely monitor Microsoft's implementation of the EU Digital Markets Act on its Windows operating system and cross-platform Microsoft Store, and to back up the continued availability of Activision Blizzard games on rival consoles and subscriptions "with rigorous compliance and enforcement mechanisms." The EGDF supports the EU Commission's in-depth investigation, but on the bottom line believes the upside outweighs the potential downside:

It may not be a coincidence that the EGDF drew attention to its December 2022 position paper on the day the European Commission's intent to hand down a Statement of Objections (SO) became known. My interpretation of the Reuters artice is that there still is hope for a constructive solution in the EU. The SO is an important procedural step and a show of force. If it comes down, it will serve as a stern warning to Big Tech companies that their major acquisitions may face stiff resistance. But an SO is not the end of the world either when there are clear procompetitive benefits (such as the ones highlighted by the EGDF) and a will to offer meaningful and justiciable remedies.

I consider the EGDF statement rather significant, but let's not forget about the outcome of a survey of Call of Duty gamers by Chile's competition authority: 61% of CoD players would rather switch games than consoles.

It's more instructive to listen to gamers and small and medium-sized game developers than to Sony.