Microsoft's Activision Deal Will Harm UK Gamers, Says Watchdog
Regulators globally are concerned that the acquisition will make Microsoft too powerful in the gaming world.
Microsoft's Activision remains under scrutiny in the UK.
Microsoft's planned acquisition of Activision Blizzard will likely harm gamers, the UK's competition watchdog said Wednesday.
The merger is likely to increase Microsoft's power in cloud gaming, harming UK gamers who cannot afford expensive consoles, the UK's Competition Markets Authority (CMA) said in a statement. There is also a chance of the deal weakening the rivalry between Microsoft's Xbox and Sony's PlayStation game consoles, the watchdog added.
Leaders at Microsoft and Activision announced the $68.7 billion all-cash deal back in January 2022. The acquisition, if it goes ahead, will give the Xbox maker control of one of the biggest video game companies in the world. But the deal is facing threats on multiple fronts, with the FTC in the US and the EU's Competition Commission also expressing concerns that the acquisition would give Microsoft outsized power, leading to an uncompetitive gaming industry.
"Our job is to make sure that UK gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation," Martin Coleman, chair of the CMA's independent panel of experts, said in a statement. "We have provisionally found that this may be the case here."
Microsoft corporate vice president and deputy general counsel Rima Alaily said in a statement that the company is offering effective and easily enforceable solutions that address all of the CMA's concerns.
"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," said Alaily. "When we say equal, we mean equal. 10 years of parity. On content. On pricing. On features. On quality. On playability."
Solutions suggested by the CMA include spinning off the part of Activision that makes flagship game Call of Duty, or separating Activision from Blizzard entirely. Microsoft will now have several weeks to submit its own suggested remedies to the CMA for review.
In a statement, an Activision spokesperson said: "We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals, where competitive, fair-dealing business can innovate and thrive, and where the whole UK economy can grow productively and sustainably."