UK investigators are to start a second, more in-depth investigation into Microsoft’s purchase of Activision Blizzard, amid fears of a monopoly.
Microsoft announced it was planning to acquire Activision Blizzard back in January, but there’s never been any guarantee the plan would go through – in fact, at one point Wall Street was betting against it.
In order for it to happen, it has to be cleared by multiple regulatory bodies across the world, a process that, even if they all say yes, is not expected to be completed until well into next year.
Governments are worried that the purchase will give Microsoft too much of an advantage, with the initial report by the UK’s Competition and Markets Authority (CMA) stating that the acquisition has the potential to lead to ‘a substantial lessening of competition in gaming consoles, multi-game subscription services, and cloud gaming services.’
There’s particular concern over Microsoft having control over Call Of Duty, which is regularly one of the top two or three selling games in any given year, even though Microsoft has promised to keep it multiformat.
Microsoft has attempted to downplay Call Of Duty’s importance, going so far as to try and pretend that Call Of Duty is ‘nothing unique’ and not a ‘must have’ title, despite the fact that they paid £50 billion for it.
According to CMA though Call Of Duty is still ‘capable of making a material difference to the success of rivals’ gaming platforms.’
Unusually for a government agency, the CMA seems to have a good understanding of the way the games industry works, as they suggest that Nintendo will be less affected, as they have a different target audience and console technology.
They also seem sensibly cautious about Microsoft’s claims that Call Of Duty will not become a console exclusive, pointing out that’s not the case for Bethesda titles such as Starfield and The Elder Scrolls 6.
‘As the multi-game subscription market is still in its infancy, the effect of the merger could be to tip or significantly increase concentration in the market in Microsoft’s favour before future rivals have a chance to develop,’ says the report, which you can read in full here.
Controversial Activision Blizzard CEO Bobby Kotick has already written to investors concerning the report and states that he doesn’t expect it to derail the acquisition, which he expects to be completed by June next year.
‘While a complication, I don’t expect it to scuttle the deal, and the UK concessions will likely be organised to mirror settlement/consent decree negotiations that likely are or will be otherwise in the works with the other major regulatory authorities. I still see a deal closing sometime next year,’ he said.
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