Microsoft-Activision Deal Could Hurt Competition, CMA Says

The United Kingdom’s antitrust watchdog said Microsoft’s $69 billion acquisition of video game maker Activision Blizzard could hinder competition and warrants further investigation.

The Competition and Markets Authority (CMA) said in statement Thursday (Sept. 1), the deal — the largest ever for both gaming and Microsoft — could harm the industry if Microsoft were to block competitors from accessing Activision’s popular games.

“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,” the authority said.

Microsoft President and Vice Chair Brad Smith told PYMNTS: “We’re ready to work with the CMA on next steps and address any of its concerns. Sony, as the industry leader, says it is worried about ‘Call of Duty,’ but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less.”

Microsoft Gaming CEO Phil Spencer underscored this point in a company blog post: “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.”

As PYMNTS has noted, the deal would make Microsoft the third-biggest gaming company in the world, assuming the deal closes by its deadline of June of next year.

Read more: UK Antitrust Watchdog Scrutinizes Microsoft-Activision Deal

“This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse,” the company said in its original January announcement.

The CMA noted in its statement that Microsoft and its Xbox system, along with PlayStation maker Sony and Nintendo dominated the console market for two decades, leaving little room for newcomers.

The CMA said it is also “concerned that Microsoft could leverage Activision Blizzard’s games together with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services.”

See also: Fears Mount About Microsoft-Activision Deal Being Finalized

The authority said if its concerns are not addressed, it will hold “an in-depth Phase 2 investigation to reach a decision that works in the interests of U.K. gamers and businesses.”

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