Microsoft takeover of Activision Blizzard raises concerns at UK regulator

Competition watchdog asks companies to address questions, with possible investigation to follow

The UK’s competition watchdog has expressed reservations about Microsoft’s $68.7 billion (£59.6 billion) acquisition of Activision Blizzard, the company that publishes Call of Duty, and has given the two businesses five days to respond.

The Xbox owner’s proposed acquisition of the business behind well-known games like Candy Crush and World of Warcraft, the largest gaming industry merger ever, “could substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services,” the Competition and Markets Authority (CMA) warned.

Microsoft already possesses the top gaming console (Xbox), the top cloud platform (Azure), and the top PC operating system (Windows OS), all of which may be crucial to its success in the cloud gaming market, according to the CMA.

The deal will be referred for a phase 2 investigation, allowing an impartial panel of experts to examine the risks in more detail. The two companies now have five working days to submit proposals to address its concerns. If suitable suggestions are not submitted, however, the deal will be referred for a phase 2 investigation.

Sorcha O’Carroll, senior director of mergers at the CMA, expressed worry that Microsoft would affect current and potential competitors in multi-game subscription services and cloud gaming by using its influence over well-known titles like Call of Duty and World of Warcraft after the merger.

Microsoft’s chief of gaming, Phil Spencer, responded by stating that the business would follow a “principled course.”

As we’ve previously stated, we’re dedicated to creating the same Call of Duty game, Spencer added.

Both Microsoft and Sony are investing billions to expand their subscription services’ catalogs.

The owner of PlayStation has introduced PlayStation Plus Premium, a rival to Game Pass, and spent $3.7 billion to buy Bungie, the company behind Destiny.

Skyrim, Fallout, and Doom creator ZeniMax was already acquired by Microsoft for $7.5 billion.

Independent developers and publishers have benefited financially from the bidding war, but it has also increased concerns about the inevitable bust that will occur once the golden times are over.

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