Microsoft/Activision Deal May Lead to Competition Concerns, Says UK’s CMA

Microsoft Activision

As expected, the United Kingdom's Competition and Markets Authority (CMA) has rendered its preliminary verdict on the Microsoft/Activision Blizzard deal. There will be a more in-depth review due to competition concerns.

Sorcha O’Carroll, Senior Director of Mergers at the CMA, stated:

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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.

If our current concerns are not addressed, we plan to explore this deal in an in-depth Phase 2 investigation to reach a decision that works in the interests of UK gamers and businesses.

For its part, Microsoft's Head of Gaming Phil Spencer published a lengthy reply highlighting why this deal would not actually introduce any competition issues within the gaming industry.

We’ve heard that this deal might take franchises like Call of Duty away from the places where people currently play them.  That’s why, as we’ve said before, we are committed to making the same version of Call of Duty available on PlayStation on the same day the game launches elsewhere.  We will continue to enable people to play with each other across platforms and across devices. We know players benefit from this approach because we’ve done it with Minecraft, which continues to be available on multiple platforms and has expanded to even more since Mojang joined Microsoft in 2014.  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.

We will continue to engage with regulators with a spirit of transparency and openness as they review this acquisition. We respect and welcome the hard questions that are being asked. The gaming industry today is robust and dynamic. Industry leaders, including Tencent and Sony, continue to expand their deep and extensive libraries of games as well as other entertainment brands and franchises, which are enjoyed by players everywhere. We believe that a thorough review will show that the combination of Microsoft and Activision Blizzard will benefit the industry and players.

Spencer also confirmed that Activision Blizzard's library, including Overwatch, Diablo, and Call of Duty, would be headed to Game Pass. That is, of course, if the deal ends up going through.

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We should hear from other regulators, such as the United States FTC, fairly soon. Stay tuned.

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