UK softens its criticism of competition concerns in Microsoft’s purchase of Activision
The UK Competition and Markets Authority (CMA) has softened the scope of its concerns about the impact on competition of the acquisition of Activision Blizzard by Microsoft, agreed a year ago at about 69,000 million dollars (64,424 million euros), considering that it would not be beneficial for the American multinational to exclusively limit games like ‘Call of Duty’ to its Xbox console.
Although the British Competition regulator had expressed its concerns about the impact of the transaction on the cloud and console gaming segments in its provisional conclusions last February, has narrowed the scope of these issues to the cloud gaming industry after the evidence received during the consultation period with the interested parties.
In this sense, the CMA investigation group has updated its provisional findings and now considers, still provisionally, that the transaction “will not result in a substantial lessening of competition in relation to console gaming in the UK”.
In this regard, he explained that the new data indicates that for Microsoft an exclusivity strategy for its consoles in Activision games, including ‘Call of Duty’, “would generate significant losses in any plausible scenario”, so it wouldn’t be commercially beneficial for Microsoft to make ‘CoD’ exclusive to Xbox after the agreement, while Microsoft will still have incentives in the game being available for PlayStation.
In any event, the CMA has made it clear that the update relates only to competition in the supply of consoles and not the impact on competition in the supply of cloud gaming services, where the CMA continues to carefully consider the responses provided. in relation to the interim findings published in February pending the issuance of its final report before April 26, 2023.
“Having considered the additional evidence provided, we have now tentatively concluded that the merger will not result in a substantial decrease in competition in console gaming services because the cost to Microsoft of retaining ‘Call of Duty’ from PlayStation would exceed any gains from take such action,” said Martin Coleman, chair of the independent panel of experts conducting the CMA investigation.
“Our provisional opinion that this agreement raises concerns in the cloud gaming market is not affected by today’s announcement,” he said.