The UK Competition and Markets Authority has stated it is opposed to Microsoft‘s planned acquisition of Activision Blizzard.
Microsoft announced back in January 2022 that it would acquire games developer Activision Blizzard for $68.7 billion. If the deal were to go through it would be the largest acquisition that the gaming industry has seen. However, a whole year later and the deal is yet to go through.
Antitrust regulators have been assessing the deal for some time now as there are concerns that such a large acquisition could create a monopoly. Some, such as Sony have been very vocal in that they disapprove of the deal. Try as Microsoft has to appease regulators it seems some are still not convinced.
The battle continues for Microsoft
According to BBC news, the CMA has provisionally concluded that the deal would result in higher prices, fewer choices and less innovation. So, not what Microsoft wants to hear. However, the technology corporation has claimed it would find solutions to “address the CMS’s concerns.” In the past Microsoft has put forward plans for the Call of Duty franchise, which much of this discord surrounds, stating they would ensure the game still comes to other platforms such as PlayStation for the next decade.
Microsoft corporate vice president and deputy general counsel, Rima Alaily said, “Our commitment to grant long-term 100% equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers, and increases competition in the market.” Alaily added that 75% of respondents to the CMA’s public consultation “agree that this deal is good for competition in UK gaming.”
It would seem that Microsoft is still in for weeks of debate between their own legal teams and regulators. Microsoft is standing firm that the deal would actually be a positive for the gaming industry and would create more options for gamers, not less. A deal of this magnitude has never been seen within the gaming industry and while the focus seems to be on the Call of Duty franchise, Activision Blizzard also owns one of the biggest mobile games, Candy Crush Saga.
A way forward
One of the suggestions from the CMA focuses on Call of Duty and how Activision Blizzard could possibly sell the asset. This would of course mean that Microsoft would find less value in the acquisition and Activision would lose one of its biggest gaming titles. It would however please Sony and its PlayStation ecosystem. Considering Microsoft has already offered to keep the game on other platforms for years to come, it seems that while there is room for negotiation, losing the IP would be a tall order.
While this latest statement does not play in the favour of Microsoft the CMA will not be issuing its final report until April 26th, 2023. The deal is also facing regulators across the EU and the US.