The British regulator ruled that Microsoft’s deal to buy publisher Activision Blizzard for $68.7 billion will lead to higher prices for British gamers and less competition.
The Competition and Markets Authority (CMA) launched an in-depth investigation in September, following a series of concerns about the biggest takeover in the history of technology companies. The regulator believes the deal will ease the global rivalry between Microsoft’s Xbox and Sony’s PlayStation consoles.
The investigation included site visits and hearings with executives from Microsoft and Activision, the analysis of more than 3 million internal documents from both companies, the commissioning of an independent survey of UK gamers and the collection of evidence from other game console vendors, game publishers and cloud gaming service providers.
The regulator found that Microsoft considered it commercially viable to make Activision’s games exclusive to its own gaming cloud service (or available on other services on significantly worse terms). Microsoft already accounts for about 60-70% of global gaming cloud services, and it also has other important advantages in cloud gaming through its ownership of Xbox, the leading PC operating system (Windows) and global cloud computing infrastructure (Azure and Xbox Cloud Gaming).
The CMA has previously established that the purchase of one of the world’s most important games publishers will strengthen this strong position and significantly reduce the competition that Microsoft would otherwise face in the UK cloud games market. This could change the future of gaming, potentially hurting UK gamers, especially those who can’t or won’t buy an expensive games console. [Xbox] or a gaming PC.
A small number of key games, including Call of Duty (CoD), Activision’s flagship game, have been found to play an important role in the development of cross-console competition. The CMA’s preliminary findings noted that the strategy of buying game studios and turning their content into exclusives for Microsoft platforms was used by the company after several previous acquisitions of game studios.
“Our job is to ensure that British gamers are not caught in the crossfire of global deals that could later harm competition and lead to higher prices, less choice or less innovation,” said Martin Coleman, chairman of the independent panel of experts leading the inquiry. — We previously discovered that it could be here. We have also today sent out to the companies an explanation of how our issues might be resolved, asking for their views and any alternative proposals they would like to submit.”
Microsoft’s offer for Activision Blizzard, the publisher of World of Warcraft, Candy Crush and a host of other popular games, eclipses its previous biggest deal, the $26 billion purchase of LinkedIn in 2016.
The purchase would make Microsoft the world’s third-largest gaming company by revenue, behind China’s Tencent and Japan’s Sony, maker of the PlayStation game console. It’s also the biggest deal in tech history, eclipsing the $67 billion Dell paid in 2015 to buy digital storage company EMC.
The CMA will accept responses from interested parties to its preliminary findings by 1 March 2023. The final verdict of the regulator is expected after April 26, 2023.
EU to review deal between Microsoft and Activision Blizzard for compliance with antitrust laws – Reuters
Sources: GOV.UK, The Guardian
