Acquisition of Activision Blizzard by Microsoft is facing increasing difficulties. The Competition and Markets Authority, Britain’s competition authority, opposes this in its current form. She suggests that Microsoft only buy a portion of the action, suggesting, for example, that they do not include the Call of Duty series.
The latter is considered too important to fall into the hands of the American giant because it would disadvantage its competitors, and in particular the Sony PlayStation. The Japanese manufacturer was categorically opposed, calling this operation a “threat to the gaming industry.” However, Microsoft offered guarantees such as a commitment to continue publishing the series on the PlayStation for at least ten years, and another commitment to re-release games on Nintendo consoles. It wasn’t enough.
Risks for the console and cloud gaming market
The UK competition watchdog said in a preliminary opinion and after five months of investigation that the merger could lead to “a significant reduction in competition in the video game console sector”, dampening “an important rivalry between Xbox and PlayStation”. The same problem is in the cloud gaming sector. The CMA, while noting that Microsoft already owns 60-70% of the global market, fears that the Activision purchase will “strengthen this strong position” and greatly reduce the possibility of future competition.
“Our challenge is to ensure that players are not caught in the crossfire of global deals that, over time, can damage competition, raise prices, reduce choice and innovation. That may be the case with this acquisition,” Martin Coleman, chairman of the board of independent experts involved in the investigation, detailed.
The CMA has proposed solutions that could allow this operation to be accepted, in particular a commitment for Microsoft to split up the Activision Blizzard King group and buy out only a portion of its operations. Among them, as mentioned above: making the Call of Duty series an independent entity “able to effectively compete with the new owner.” The offer is certainly not well received by the American giant because it is the group’s most important license. But separating from the activities of Blizzard (World of Warcraft, Diablo, Overwatch) or King (Candy Crush Saga) is probably not to his liking either.
Microsoft reportedly offered Sony a 10-year contract with Call of Duty Games
“Our long-term commitment to providing 100% equal access to Call of Duty for Sony, Nintendo, Steam and others preserves the benefits of the agreement for players and developers and increases competition in the market,” said Rima Alai, Vice President and Assistant. Microsoft General Counsel, at Engadget media.
Microsoft now has until February 22 to respond to the CMA’s concerns and propose solutions, and the CMA will review them and release its final report on April 26. But even if he finds a compromise, he will be uncomfortable. This alleged takeover is the subject of worldwide investigations. The US Federal Trade Commission (FTC) has also filed a lawsuit to try to block it, and the European Commission has launched a “thorough investigation” of the deal and is due to file its objections on April 11.
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