Competition watchdog drops console gaming concerns on £57bn Microsoft-Activision takeover
The Competition and Markets Authority (CMA) is set to drop many of its concerns about Microsoft’s takeover of Call of Duty and World of Warcraft publisher Activision Blizzard, as it no longer believes the $68.7 billion (£57 billion) deal would hurt the UK console gaming market.
The monopolies watchdog now says that the deal “will not result in a substantial lessening of competition in relation to console gaming in the UK”, dropping what had been the most significant concerns it had about the takeover.
Initially, the CMA warned that the mega-merger could substantially reduce the competition between Xbox and PlayStation in the UK, as Microsoft may choose to make popular Activision games like Call of Duty exclusive to its own Xbox consoles.
It suggested that Microsoft may have to divest the arm of Activision that makes the Call of Duty franchise in order to get the deal over the line.
However, after reviewing new evidence, the watchdog has now determined that it not would be in Microsoft’s own interest to stop selling the PlayStation version of Call of Duty.
“While the CMA’s original analysis indicated that this strategy would be profitable under most scenarios, new data (which provides better insight into the actual purchasing behaviour of CoD gamers) indicates that this strategy would be significantly loss-making under any plausible scenario,” it said.
As a result, the CMA review of the acquisition - one of the largest mergers in corporate history - is now set to deal only with competition in the supply of cloud gaming services.
An Activision Blizzard spokesperson welcomed the CMA dropping the console gaming concerns.
“The CMA’s updated provisional findings show an improved understanding of the console gaming market and demonstrate a commitment to supporting players and competition. Sony’s campaign to protect its dominance by blocking our merger can’t overcome the facts, and Microsoft has already presented effective and enforceable remedies to address each of the CMA’s remaining concerns,” they said. “We know this deal will benefit competition, innovation, and consumers in the UK’.
The CMA’s latest update is a provisional finding, meaning that there is still a possibility of further changes if any parties involved submit new evidence. It will issue a final report on 26 April.