S Korea's antitrust regulator approves Microsoft's takeover of Blizzard

SEOUL South Korea's antitrust regulator said yesterday it has decided to approve Microsoft Corp's takeover of Activision Blizzard Inc as the deal is unlikely to hinder competition in the Korean gaming market.

The review came amid concerns that Microsoft, which has the Xbox console business under its wing, may disrupt the competition by distributing Blizzard's popular gaming titles, including "Call of Duty" and "Diablo," only through its platforms.

Microsoft reported its plan to acquire Blizzard in a US$68.7 billion deal to South Korea's Fair Trade Commission (FTC) in April 2022.

"After reviewing the situation, we have concluded that it is unlikely for Microsoft to pursue a foreclosure strategy by exclusively distributing Blizzard's games through its own platforms," the FTC said in a statement. "Even in the event of a foreclosure, the move will not exclude rivals from the market."

The FTC noted that games developed and distributed by Microsoft and Blizzard hold only a small portion of the market, and that such titles are not as popular in South Korea compared with overseas.

Such products only took up 2 to 4 per cent of the South Korean market for console games in 2021, along with 4 to 6 per cent in the cloud gaming service market, the regulator said.

"Call of Duty" alone took up less than 2 per cent of the South Korean console market in 2021, compared with up to an 8 per cent share posted in the global market, according to the FTC data.

"The number of console users in the domestic market is small, with people showing a relatively higher preference for PC games," it added. "The likelihood of Microsoft restricting competition, considering their primary focus on providing cloud-based content through Xbox consoles, is limited."

The regulator also noted Playstation currently takes up 70 to 80 per cent of the local console market, compared with Xbox's 5 to 10 per cent.

Japanese authorities, meanwhile, also gave an unconditional approval on the takeover in March despite concerns from its domestic player Sony that holds the Playstation console under its wing.

The EU gave a nod to the deal under condition that Blizzard provides its contents to other rival cloud platforms. The US plans to announce the decision in August.

South Korea was the world's fourth-largest gaming market by taking up 7.6 per cent of the total. The US took up 22 per cent, followed by China with 20.4 per cent and Japan with 10.3 per cent, according to the FTC.