If Microsoft and Activision are both US companies, but have international offices, do they have to get approval from every country they operate in? Could they merge just the US parts or non-UK parts?
Yes, both companies have offices around the globe, with corporate entities all over the place. As those have to operate within the laws of the countries they're incorporated in, if they get blocked by some local watchdog, the acquisition wouldn't be able to be completed in that country.
More so, the merger is also discussed in the EU in general, which is a bigger market than just the UK alone, and if the acquisition gets blocked in the UK, EU watchdog will surely use that block as prior material for doing a EU-wide block.
Hence Microsoft is lobbying both the UK itself and Europe wide for making the acquisition go through.
Of course, even if the acquisition gets blocked everywhere but in the US, the US counter-part can still be acquired, but not sure how much sense that would make, they'll probably end up not going through with it at all in that case.
I don't think the US has all of neither, but especially not revenue. Asia tends to be the biggest market, with the US being the second and EU third. Usually, US has maybe half of the profits as the Asia counterpart, while EU has half of that.
So if the acquisition gets blocked in the EU, they'll miss out on a ton of revenue, for sure.
Not to mention the operational overhead of actually operating the machinery when the machinery is banned in the EU but not the US.
39.99 in the US, 22-23 dollars in China and India. In indonesia the game sold for as little as 13 cents a license. It is slightly higher in the EU and UK but by very little. In this case 24% of all players are American. The UK is 2%. So even with a slightly higher price, they're not getting anywhere close to the revenue that US consumers are generating. Russia has 10% of the player population and the game sells for 13 dollars. I don't think the population correlates to revenue when the game in nearly every market is going to see for less, or attract much less players.
> Usually, US has maybe half of the profits as the Asia counterpart, while EU has half of that.
But is this actually the case with Activision? Aren’t most of their games banned in China (this shrinking the Asian audience massively) and don’t they charge a lot less?
Some of Microsoft's top game development studios, specifically right now, Rare and Playground Games are based in the UK and contribute at least some of the profit and arguably a lot of talent.
(Microsoft has a really interesting history of UK game development teams, going way back, including ones they ultimately shut down such as Lionhead.)
> 28. The CMA’s primary duty is to seek to promote competition for the benefit of consumers. It has a duty to investigate mergers that could raise competition concerns in the UK, provided it has jurisdiction to do so.
> 29. Microsoft announced in January 2022 that it had agreed to acquire Activision for a purchase price of USD 68.7 billion. The Merger was conditional on receiving merger control clearance from several global competition agencies, including the CMA.
> 30. While both Microsoft and Activision are US-based entities, the question for the CMA is whether the Merger may have an impact on competition in the UK. This link to the UK can be established based on the turnover of the business being acquired in the UK (ie whether the UK turnover of that business is more than £70 million). In this case, we concluded that the CMA had jurisdiction to review this Merger because Activision met that threshold in FY2021.
The CMA's final decision is a 418 pages-long report. I doubt any of the commenters here have read it before throwing in their opinion about the case or the decision.
