Microsoft’s Deal to bag gaming giant Activision Blizzard faces antitrust scrutiny in the UK. The Competition and Markets Authority (CMA) announced an in-depth investigation, if the companys fails to submit suitable proposals to address its concerns in the next few days.
The CMA opened a formal probe of the acquisition in July. Feedback on the deal indicated that it could lead to less competition for gaming consoles, multi-game subscription services, and cloud gaming services. Now, the CMA has decided that the deal merits closer attention because it could substantially lessen competition in these industries.
Microsoft and Activision will have five working days to submit a remedy to the CMA that will stop the CMA from carrying out a deeper investigation of these companies.
Sorcha O’Carroll, Senior Director of mergers and acquisitions at the CMA, said, “Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming.”
The CMA is concerned that if Microsoft’s Xbox acquired Activision, this would have a negative effect on competition from console rivals, such as recent and future competitors.
Activision is the company behind Call of Duty and World of Warcraft. They also own Candy Crush and other games, among other companies.
The CMA’s decision noted two concerns as input foreclosure. The first was that Microsoft can make content from ABK (Activision Blizzard) such as Call of Duty exclusive to Xbox or Game Pass, or otherwise enhance the availability of Xbox and Game Pass by delaying releases and imposing licensing price increases.
It predicts that Sony would be the one most likely to be hurt in a shorter race.
The regulator has evidence about the potential of combining the two companies, believing that Microsoft would be able to use its position in gaming consoles, cloud markets and operating systems to deter competitors.
Spencer said, “We are committed to making the same version of Call of Duty available on PlayStation on the same day the game launches elsewhere.”
He further added, “As we extend our gaming storefront across new devices and platforms, we will make sure that we do so in a manner that protects the ability of developers to choose how to distribute their games.”
In an open letter by Activision’s CEO, Bobby Kotick, to the employees said, the firm’s leadership team expects oversight of the acquisition to be a long process. The deal is “likely” to close on January 1st, 2024.
“We expect the deal to take over a year, as we still have to receive approvals from multiple governments,” he writes. “The process with regulators is moving along as expected.”
Multiple companies are investing in gaming and government regulators are looking into their industry.
Analysts want to see the details of the Microsoft-Activision acquisition.