The UK Competition and Markets Authority (CMA) has raised fresh concerns over Microsoft’s takeover of Activision Blizzard.
The CMA found that the proposed $75 billion acquisition could reinforce Microsoft’s strong market position and substantially reduce competition in the cloud gaming market. “This could alter the future of gaming, potentially harming UK gamers, particularly those who cannot afford or do not want to buy an expensive gaming console or gaming PC,” the regulator said in its provisional findings.
The watchdog has invited both parties to offer proposals to alleviate the competition concerns, and will give a final decision on 26th April.
Though far from fatal, this latest round of scrutiny strikes another blow to a deal caught in regulatory crossfire since its announcement in January 2022. In September, Sony argued that the acquisition risks Microsoft pulling Call of Duty from PlayStation, thereby inhibiting its ability to compete. When Microsoft offered to keep the series on the Sony console for at least another three years, Sony called the proposal inadequate.
The deal is also being investigated by the European Commission, while the US Federal Trade Commission (FTC) is suing Microsoft in order to block the takeover. According to the FTC, control of Activision would grant Microsoft control over consumers’ access to games. The company could raise prices for non-Xbox users, warned the Commission, or cut off access entirely.
Now the CMA argues that a small number of key games, including Call of Duty, play an important role in driving competition between consoles. It adds that market conditions would make it commercially beneficial for Microsoft to make Activision games exclusive to its own cloud gaming service. “The CMA’s provisional findings note that this strategy, of buying gaming studios and making their content exclusive to Microsoft’s platforms, has been used by Microsoft following several previous acquisitions of games studios.”
The software giant responded that it remains committed to granting long-term, equal access to Call of Duty on rival platforms, thereby preserving market competition. The company previously accused the CMA of relying on “self-serving statements by Sony which significantly exaggerate the importance of Call of Duty.”