Phil Spencer on Xbox future in case Activision Blizzard deal falls apart: "It's not some linchpin for the long term"

The $68.7 billion acquisition of Activision Blizzard is not an easy ride for Microsoft, which is still trying to convince regulators to clear it. Phil Spencer, however, is confident that the future of Xbox doesn’t depend on its outcome.

Spencer, who visited the UK for the upcoming talks with the Competition and Markets Authority (CMA), was interviewed by The Times about the possibility of global regulators blocking the Activision Blizzard deal.

“This is an important acquisition for us. It’s not some linchpin to the long term — Xbox will exist if this deal doesn’t go through,” he said (thanks VGC).

The Microsoft Gaming CEO added that he was taken aback by such strong resistance from US and European regulators, who see the $68.7 billion deal as a serious threat to market competition. “I don’t have great rationale for … how better competition in consoles is somehow hurtful for consumers,” Spencer said.

He believes that this acquisition will ultimately give Microsoft, Sony, and Nintendo a stronger foothold in the console market, which, as a result, should give consumers more choice in terms of unique content.

“I’d hate to see consoles go to where phones are where there are only two manufacturers,” he noted. “And, right now, we have three good competitors.”

The CMA, which is now in the middle of its in-depth investigation into the acquisition, recently refused to clear the deal without concessions. The UK watchdog offered Microsoft a list of possible remedies, including buying Activision Blizzard without the Call of Duty IP.

Last week, Microsoft attended a closed hearing at the European Commission to try to convince the regulator to clear the deal. During the hearing, the company’s president Brad Smith noted that in Europe, “Sony has an 80% share [of the console market]. Globally, it is about 70/30.”

The Japanese publisher has been one of the most vocal opponents of the deal. Sony tried to convince antitrust regulators to block the acquisition and also refused Microsoft’s proposal to sign a 10-year deal to keep Call of Duty on PlayStation.