New obstacle for the spectacular acquisition of Activision Blizzard by Microsoft. Announced in January 2022, the operation is being studied by the competition authorities in the United States, but not only. Things seem to be getting seriously complicated in the UK. And for good reason, the Competition and Markets Authority (CMA), the British competition watchdog, has opened an investigation to study the impact of this $68.7 billion acquisition.
These investigations reflect the concerns of the British regulator, who fears that this takeover will be harmful to competition in the video game market, and more particularly for streaming platforms (cloud gaming). The CMA is particularly wary of Microsoft because of its Game Pass subscription, whose catalog of games will be expanded if the acquisition of Activision Blizzard comes to an end.
call of dutya potential Game Pass exclusive that worries Sony
British Antitrust believes that the operation “could allow Microsoft to return the publisher’s catalog, including its saga call of duty, exclusive to Game Pass or degrade access to its competitors”. For the CMA, the big loser of this transaction would be Sony while the franchise call of duty is very popular with PlayStation gamers. The loss of it “could reduce Sony’s revenue and the number of buyers of its consoles”which would have the consequence “significantly weaken the direct rival of Microsoft”judges the CMA.
Certainly, Phil Spencer, big boss of the Xbox division at Microsoft, had assured at the beginning of the year that the license call of duty will remain on Sony’s PlayStation consoles. But nothing prevents the American firm from not renewing the publishing contracts after their expiration, and therefore from affording the exclusivity of the franchise in a few years. Jim Ryan, boss of PlayStation, also revealed a few days ago that “Microsoft has proposed that call of duty remains on PlayStation only three years after the end of the current agreement between Activision and Sony”which is “an inadequate proposal on many levels”.
UK antitrust awaits guarantees
It is now up to the British regulator to judge whether Sony’s fears are justified. If the CMA does not obtain guarantees from the American group, which were initially expected until September 8, it could veto the operation or validate it under conditions. “It’s a big difficult transaction. It requires a thorough investigation”according to a source familiar with the matter in Brussels, quoted by the FinancialTimes.
The obstacle course has only just begun for Microsoft, which will have to show its credentials for this mega-acquisition to be validated in the United Kingdom, the United States and Europe. As a reminder, the operation should enable the Redmond giant to become the third player in the video game market, after Tencent and Sony.