UK competition authority says Microsoft-Activision merger could hurt gamers

According to the British antitrust authority, the merger of Microsoft and Activision could harm gamers. It’s hard to predict how things will turn out.

The UK competition authority concluded that Microsoft’s proposed $69 billion acquisition of Activision Blizzard could lead to “significantly less competition in the video game console market”and “harm British gamers “. As an interim result, the Markets Competition Authority (CMA) explains that this merger will require Activision to be split into several separate entities.

Microsoft and Activision merger could hurt gamers, UK antitrust authority says

The government says it has conducted extensive research over the past five months to determine the potential impact of this agreement. Recalling that Microsoft already represents 60 to 70% of the world’s cloud gaming services, he explains that the purchase of Activision “will strengthen its already strong position”and significantly reduce competition from Microsoft in the cloud gaming market. This could “potentially hurt UK gamers, especially those who can’t or don’t want to afford an expensive gaming console or PC”.

The CMA also clarified that this agreement could work if Activision Blizzard would split its operations. This could, for example, divide Activision and Blizzard or the organization operating under the largest Call of Duty (CoD) license. The idea, she says, is to keep organizations “able to fight effectively under separate leadership”with this new structure.

In response, Microsoft said it had already resolved CMA competition issues: “We’re committed to providing effective and easy-to-implement solutions to CMA issues,”Microsoft’s Rima Alaily told Engage. “Our promise of a long-term agreement for equal access to Call of Duty for Sony, Nintendo, Steam and others preserves the benefits of this agreement for players and developers while increasing competition in the marketplace.”

It’s hard to predict how things will turn out

The merger, first announced last year, will allow Microsoft to add titles like CoD to its already extensive catalog. The agreement has put many regulators on their guard, in particular over concerns that the latter will deprive the Sony PS5 and other consoles of some of its flagship games, including CoD. For a very furious Sony, “this is a game changer and a threat to our industry.”

Last September, the CMA announced the opening of an antitrust investigation into the merger. In the United States, the Federal Trade Commission has also filed a lawsuit to prevent the acquisition, and the European Union is due to make its decision on April 11.

Microsoft said at the time that the CMA’s concerns were misplaced and that its arguments were based “only on Sony’s arguments”. In November, the giant confirmed that it would be offering Call of Duty for PlayStation “forever”and promised to bring the game to the Nintendo Switch console and Steam.

Microsoft now has until February 22 to respond to the CMA’s concerns, with the regulator’s final report expected on April 26. “Our job is to ensure that UK gamers are not caught in the crossfire of global deals that, over time, could damage competition and lead to price hikes, reduced choice and reduced costs. We found that this could be the case here as well,” concluded Martin Coleman, head of the group of independent experts who conducted the investigation.