UK Authority Finds Microsoft-Activision Deal May Harm Gamers

By | Niranjan Bhargav 10 Feb, 2023

UK Authority Finds Microsoft-Activision Deal May Harm Gamers

The UK’s competition watchdog, the Competition and Markets Authority (CMA), has raised concerns about Microsoft’s $69 billion proposed acquisition of Activision Blizzard. In a preliminary report, the CMA claimed that the deal could result in “a substantial lessening of competition in gaming consoles” and “harm UK gamers.”

Potential Impact on Gamers:

The CMA stated that Microsoft already has a 60-70% share of the global cloud gaming market and acquiring Activision Blizzard would further strengthen its position and reduce competition in cloud gaming. This could potentially harm UK gamers who cannot afford or choose not to purchase a gaming console or gaming PC.

Divesting Activision Blizzard’s Assets:

The CMA suggested that the deal could proceed if Activision Blizzard divested parts of its business, such as the Activision and/or Blizzard segments, or the business behind its biggest franchise, Call of Duty. The objective would be to maintain assets that can compete effectively under separate ownership.

Microsoft’s Response:

Microsoft has addressed the CMA’s concerns and promised “enforceable solutions.” The company has committed to granting equal long-term access to Call of Duty for all gaming platforms, including Sony’s PS5, Nintendo Switch, and Steam, in an effort to increase competition in the market.

Global Regulatory Review:

The CMA is not the only regulatory body examining the Microsoft-Activision Blizzard merger. The US Federal Trade Commission has sued to block the deal, while the EU is set to make a decision on April 11th. Microsoft has until February 22nd to respond to the CMA’s concerns, with a final report due on April 26th.

The UK’s competition watchdog has raised concerns about Microsoft’s proposed acquisition of Activision Blizzard and its potential impact on UK gamers. The CMA has suggested that the deal could proceed if Activision Blizzard divested parts of its business. Microsoft has promised to address the CMA’s concerns and increase competition in the gaming market by granting equal access to Call of Duty for all gaming platforms. The deal faces regulatory reviews by various governing bodies, with a final decision expected in April.