UK Regulator Says Microsoft’s Activision Blizzard Deal Would be “to the Detriment of Gamers”
The Competition and Markets Authority of the United Kingdom has released a new report on Microsoft’s planned acquisition of Activision Blizzard. The CMA assessed the impacts relating to games consoles and cloud gaming within the UK.
The feedback isn’t promising for the merger, with the CMA’s provisional findings stating that the purchase “may be expected to result in a substantial lessening of competition”.
A major point of concern within the deal relates to the Call of Duty franchise, More specifically, the advantage it could offer Xbox if made exclusive.
“Microsoft would find it commercially beneficial to make CoD exclusive to Xbox or available on Xbox on materially better terms than on PlayStation,” the report reads. “We provisionally found that this would substantially reduce competition in gaming consoles to the detriment of gamers—Xbox and PlayStation gamers alike—which could result in higher prices, reduced range, lower quality, worse service, and/or reduced innovation.”
Perhaps the most interesting aspect of the report comes in the CMA’s recommendations for potential solutions to the merger. One interesting suggestion to remedy the situation is to separate the Call of Duty franchise into its own business, independent of Microsoft and Activision Blizzard.
If that isn’t possible, nor is the separation of the Activision or Activision Blizzard portions as alternatives, then the prohibition of the merger is recommended.
Microsoft has already made an offer to its competitors in Sony, Steam, and Nintendo, saying it is committed to “long term 100% equal access to Call of Duty” across all platforms for 10 years. The CMA has said it would take this into consideration as part of the remedial process.