Following a five-month-long investigation coming through “…over 3 million internal documents,” the UK’s Competitions and Markets Authority (CMA) published its provisional conclusions of Microsoft’s acquisition of Activision Blizzard on early February 8. The regulator doubled down on its initial claims, calling the acquisition harmful to UK gamers by rendering games exclusive, making higher prices, and weakening competition.
Among the many concerns listed within the findings, Cloud Gaming and industry competition remained two of the regulator’s biggest concerns. The CMA claimed that Microsoft already made up “…around 60 to 70% of the cloud gaming space,” including other important avenues of cloud gaming like owning the PC operating system Windows and global cloud computing infrastructures like Azure and Xbox Cloud Gaming. They claimed that the acquisition of Activision would only boost their presence within this sector and ”… reduce the competition that Microsoft would otherwise face in the cloud gaming market in the UK.”
The CMA offered possible remedies for it to accept the deal, mainly a “partial divestiture of Activision Blizzard” meaning either Microsoft sells off the part of the business that deals with Call of Duty, sells off the Activision segment of Activision Blizzard, or sells off both the Activision and the Blizzard segments according to Video Games Chronicle (VGC).
Responses towards the CMA’s list of remedies from other parties are due by February 22 and March 1 for its provisional findings. These submissions will contribute towards the CMA’s final conclusion by April 26, 2023.
Martin Coleman, head of the independent experts conducting the investigation gave his statement on the matter, echoing many of the conclusions above.
“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,” said Coleman. “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…”
Microsoft has remained adamant around working with the acquisition’s biggest detractors on solutions for the deal to pass. Rima Alaily, Microsoft’s corporate VP and deputy general counsel, responded to the CMA’s concerns in a statement to VGC.
“We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns,” said Alaily. “Our commitment to grant long-term 100% equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market.”
Additionally, Activision Blizzard gave its statement on the matter:
“These are provisional findings, which means the CMA sets forth its concerns in writing, and both parties have a chance to respond. We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals, where competitive, fair-dealing business can innovate and thrive, and where the whole UK economy can grow productively and sustainably.”
Microsoft’s 68.7 billion deal continues its struggle to be resolved. Currently, the deal is now under fire from regulators within Europe, the US, and the UK.