The UK Competition and Markets Authority (CMA) has released its interim findings on Microsoft’s acquisition of Activision Blizzard.
Last year, Microsoft acquired Activision Blizzard in a deal that cost around 50 billion pounds ($68 billion). However, the operation was criticized by many regulators and enthusiasts.
In September, the UK Gambling Regulatory Authority (CMA) raised concerns that the merger could “harm rivals” and “harm competition” in the gambling industry, following an investigation that she launched last summer.
The regulator has now released its interim findings on the investigation, and that’s not good news for Microsoft.
“A CMA investigation has tentatively concluded that Microsoft’s proposed acquisition of Activision could result in higher prices, less choice or less innovation for UK gamers,” the report begins.
During the five-month investigation, the CMA “heard directly from Microsoft and Activision executives, analyzed more than 3 million internal documents from both companies to get their perspective on the market, commissioned an independent survey of UK gamers and gathered evidence from other game console vendors, game publishers and cloud gaming service providers.
The interim report concludes “a small number of key games, including Activision’s flagship Call Of Duty, play a significant role in driving console competition.”
“This strategy of buying game studios and making their content exclusive to Microsoft platforms has been used by Microsoft after several previous acquisitions of game studios,” he added.
The CMA went so far as to share fears that by “buying out one of the world’s largest game publishers”, Microsoft could “significantly reduce the competition it would otherwise face in the UK cloud gaming market”. United”.
“It could disrupt the future of gaming, potentially hurting UK gamers, especially those who can’t or won’t buy an expensive games console or PC.”
“Microsoft is estimated to already account for between 60% and 70% of global cloud gaming services and, in addition, has other significant strengths in cloud gaming by owning Xbox, the leading PC (Windows) operating system and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming).”
At this stage of the investigation, the CMA has identified two possible solutions.
The first “possible structural solution” would be for Microsoft to sell the part of Activision Blizzard that deals with Call Of Duty. The second is that the CMA prohibits the merger.
The regulator added that it would consider “any other viable solution” that Microsoft, or any interested third party, may come up with, but they only have until February 22 to come forward with those suggestions before the CMA releases its final report on April 26.
The CMA also said it was aware of Microsoft’s promise to keep Call Of Duty cross-platform, which is a potential solution to its concerns, but the regulator would prefer a structural solution.
Following the interim report, Microsoft issued a statement stating, “We are committed to providing effective and easily enforceable solutions that address CMA concerns. Our commitment to giving Sony, Nintendo, Steam and others equal access to 100% In the long term, Call of Duty preserves the benefits of the agreement for players and developers and increases competition in the market.” 75% of respondents to the CMA’s public consultation agree that this deal is good for competition in UK gaming.”
Regarding the promise of “100% equal access for the long term”, Microsoft said: “When we say equal, we mean equal. 10 years of parity. In content. In pricing. In features. In the quality. In the gameplay.” .
Earlier this year it was reported that Microsoft was “likely” to receive an antitrust warning from the EU, as the European Commission prepared its “statement of objections” to the deal. These objections will need to be resolved before the transaction can proceed.
But in November 2022, Microsoft confirmed that it would offer “workarounds” to EU antitrust regulators in response to their formal objections. The following month, the North American Federal Trade Commission (FTC) confirmed that it would also try to prevent Microsoft’s acquisition of Activision Blizzard.
Phil Spencer, CEO of Microsoft Gaming, has repeatedly said that the company’s acquisition of Activision Blizzard is more about mobile games, rather than restricting AAA titles like COD, while Activision Blizzard’s chief executive , Bobby Kotick, claimed that blocking the Microsoft takeover would hurt the UK. goal of becoming a technological superpower.