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The UK regulator investigating Microsoft’s attempted $68.7bn Activision Blizzard takeover attempt has raised significant concerns over the deal going ahead.
In a provisional report published today, the UK’s Competition and Markets Authority (CMA) said that Microsoft owning Activision “could harm UK gamers” and potentially result in “higher prices, fewer choices, or less innovation”.
While provisional, the findings paint a gloomy picture for Microsoft – against a similar backdrop of concerns raised by the US Federal Trade Commission and the EU’s European Commission, which have both contested the deal as it currently stands.
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Today’s report is not a final judgement on whether the deal is dead, however. The CMA will still inform Microsoft and Activision Blizzard of “possible remedies” and options to address its concerns, with a deadline later this month.
The CMA’s final report is due by 26th April.
In response to the CMA’s provisional report, Microsoft said in a statement it would grant “100 percent equal access to Call of Duty” across all major platforms, including PlayStation – something which has previously been raised as a major sticking point.
Microsoft’s full statement on today’s decision lies below:
“We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns,” Rima Alaily, Microsoft’s corporate vice president and deputy general counsel said in a statement issued to Eurogamer.
“Our commitment to grant long term 100 percent equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market. 75 percent of respondents to the CMA’s public consultation agree that this deal is good for competition in UK gaming.
“What does 100 percent mean? When we say equal, we mean equal. 10 years of parity. On content. On pricing. On features. On quality. On playability.”
The CMA’s findings come from a five-month investigation which it says analysed more than 3m internal documents from within both Microsoft and Activision, alongside a survey of UK gamers, plus evidence from rival console makers, publishers and cloud service providers.
Much of today’s report is focused on Activision’s games, and the potential for them to be made exclusive to Xbox, and in turn that reducing the level of competition between Microsoft and Sony.
On cloud gaming, the CMA states that Microsoft’s ownership of Activision would reinforce Microsoft’s “strong position” in the sector and “substantially reduce competition”.
“Strong competition between Xbox and PlayStation has defined the console gaming market over the last 20 years,” wrote Martin Coleman, chair of the CMA’s investigation. “Exciting new developments in cloud gaming are giving gamers even more choice.
“Our job is to make sure that UK gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation. We have provisionally found that this may be the case here.
“We have also today sent the companies an explanation of how our concerns might be resolved, inviting their views and any alternative proposals they wish to submit.”
Writing on Twitter today, games industry analyst Piers Harding-Rolls wrote that this development was “not positive news for the MS ABK deal”.
“The CMA has suggested that the multi-faceted nature of the areas of concern will probably require a structural remedy to enable the deal to go through,” Harding-Rolls continued. “The chances of this deal closing have dropped.”
Activision Blizzard’s controversial boss Bobby Kotick earlier said the UK blocking the deal would leave post-Brexit Britain looking like “Death Valley” rather than Silicon Valley.
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