UK tentatively concludes that Microsoft-Activision deal could hurt gamers

The UK Competitions and Markets Authority (CMA) has published the interim findings of its investigation into Microsoft’s proposed acquisition of Activision Blizzard. The quick summary is that the regulator considers that the operation could harm British players, so it puts on the table a series of measures, including the divestment of Call of Duty. Now the parties must respond to the CMA’s proposals and the CMA will issue a final report on April 26.

“A CMA investigation has tentatively concluded that Microsoft’s proposed purchase of Activision could result in higher prices, less choice and less innovation for UK gamers,” the CMA said in its statement. The regulator is particularly concerned about the effects that the operation could have on competition from cloud gaming services and on the console market.

The CMA argues that Microsoft is one of the biggest powers in cloud gaming, a position that is bolstered by the Xbox console, Windows operating system, and Azure and Xbox Cloud Gaming infrastructure. Consequently, being able to offer Activision Blizzard’s games exclusively (or available on other services with worse conditions) on its own cloud platform would further strengthen the company’s position and reduce competition in the UK, which the CMA does not see with good eyes.

Regarding the console market, the regulator points directly to Call of Duty, a title that according to its research plays an important role when the consumer chooses a platform. The CMA believes that it would be commercially beneficial for Microsoft if Activision’s games were exclusive to its consoles (or made available on PlayStation under worse conditions). Therefore, he believes that the operation could reduce access to content and substantially lessen competition between Xbox and PlayStation in the UK, which would harm gamers.

What does the CMA propose to remedy your concerns? The solutions that the British regulator puts on the table are two: disinvestment and prohibit the purchase of Activision Blizzard. The first alternative admits three options, including getting rid of Call of Duty, the entire Activision business or both companies.