UK: Microsoft’s Acquisition of Activision Blizzard Hurts Competition

UK Microsoft's Acquisition of Activision Blizzard Hurts Competition
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The UK Competition and Markets Authority (CMA) is not a fan of the pending merger between Microsoft and Activision Blizzard. Their investigation states that a merger could lead to “higher prices, fewer choices, or less innovation for UK gamers.”

One key argument made by the CMA is Microsoft’s presence in PC operating and cloud systems. Their report states that Microsoft already accounts for 60 to 70 percent of global cloud gaming services. In addition, an acquisition of Activision Blizzard would make it “commercially beneficial” for Microsoft to make Activision’s games exclusive to Xbox platforms. 

The investigation does not mention Phil Spencer’s intentions to keep Call of Duty multiplatform. Spencer recently announced a new deal to keep the popular FPS franchise on Nintendo franchises for the foreseeable future. Microsoft is attempting to do the same for Sony consoles. Such an agreement would see Call of Duty releasing on PS Plus, Sony’s gaming library. 

Phil Spencer, head of Xbox, is on the record in his attempts to keep the franchise on Sony platforms. “As long as there’s a PlayStation,” he’s stated, “we’ll ship Call of Duty there.”

Sony’s concern with the Microsoft deal is a belief that no one can compete with Call of Duty. Other publishers disagreed, saying they could, or Sony already has strong franchises under their umbrella. 

Sony owns the online FPS Destiny rights, having bought Bungie last year.

The UK CMA Believes an Approved Merger Will Result in Far More Xbox Consoles Sold

Another key finding in the CMA’s investigation is the role Call of Duty plays in what consoles sell. 

Based on their research, the CMA says that Microsoft will find it beneficial to make Call of Duty an Xbox exclusive. This goes against what we’ve previously reported: Microsoft’s intentions to keep the franchise multiplatform.  Still, the CMA is adamant about this point. 

“The CMA’s provision findings note that this strategy, of buying gaming studios and making their content exclusive to Microsoft’s platforms, has been used by Microsoft following several previous acquisitions of games studios,” the report states. The evidence notably points to Microsoft’s acquisition of Bethesda and its parent company. Except for titles like DOOM Eternal, Deathloop, and Ghostwire: Tokyo, future Bethesda games are slated to be released only on the Xbox platform. 

There is one exception: Elder Scrolls Online. As the game is a persistently online game, Microsoft has ensured that it will continue to release on supported platforms, including PlayStation. This is a detail that the CMA report leaves out. Additionally, when the discussion on competitive pricing comes up, it also leaves out that Sony raised the price of PlayStation 5 games by $10 this generation. Xbox has not done the same at this time.

The CMA Comments on Their Investigation

“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,” said Martin Coleman, chair of the independent panel of experts conducting the investigation. “We have provisionally found that this may be the case here.”

While it seems like bad news for Microsoft, there is the potential for a deal to take place. “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.” Many have speculated that if Microsoft does not acquire specific IPs, like Call of Duty, regulators will grow a more favorable view of the acquisition. 

Phil Spencer maintains confidence that a deal will take place. But, for now, these findings by the UK’s CMA puts things in doubt. 



Written by Jake Valentine

I am the Editor-In-Chief of BossLevelGamer. I'm also a lover of video games, food, and beer.

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