Following five months of a deeper investigation, the UK CMA has provisionally concluded that the deal would reinforce Microsoft's dominant position and significantly stifle the competition that the technology major would otherwise face in the cloud gaming market in the UK
The UK CMA provisionally finds Microsoft, Activision Blizzard deal to result in higher prices and fewer choices for gamers. (Credit: Tyler Lahti/Wikimedia Commons)
The UK Competition and Markets Authority (CMA) announced that the in-depth investigation of Microsoft’s previously announced $68.7bn acquisition of Activision Blizzard has provisionally found the deal to be harmful.
According to the British competition watchdog, the deal would lead to higher prices, fewer choices, and less innovation for UK gamers.
The in-depth phase 2 probe into Microsoft’s acquisition of the US-based video game holding company was launched in September 2022 by the regulator.
Following five months of a deeper investigation, the UK CMA has provisionally concluded that the deal would reinforce Microsoft’s dominant position and significantly stifle the competition that the technology major would otherwise face in the cloud gaming market in the UK.
Citing the evidence available to it, the regulator stated that if the merger is finalised, then Microsoft will find it commercially beneficial to make the games of Activision Blizzard exclusive to its own consoles.
The UK CMA said that reducing competition by limiting other platforms’ access to Activision Blizzard’s games would considerably lessen competition between Xbox and PlayStation in the UK, which would be detrimental to UK gamers.
For helping with the assessment, the UK CMA is seeking comments on its provisional findings from any interested parties. The last date for filing the comments is 1 March 2023.
The regulator also seeks possible remedies to address its provisional concerns, which can be filed by 22 February 2023.
The UK CMA expects to issue its final report by 26 April 2023.
CMA Independent Panel of Experts Chair Martin Coleman said: “It’s been estimated that there are around 45 million gamers in the UK, and people in the UK spend more on gaming than any other form of entertainment including music, movies, TV, and books.
“Strong competition between Xbox and PlayStation has defined the console gaming market over the last 20 years. 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.”
The all-cash deal between Microsoft and Activision Blizzard was announced in January 2022. As per the terms of the transaction, Microsoft will pay $95 per share to shareholders of the publicly-listed Activision Blizzard.