Following an in-depth investigation, the Competition and Markets Authority (CMA) has voiced its opposition to Microsoft’s planned purchase of games developer Activision Blizzard.
The proposed deal would be the biggest-ever takeover in tech, with computing goliath Microsoft offering $69bn (£57bn) for the publisher of titles such as Call of Duty, World of Warcraft, and Candy Crush.
The UK regulator believes the deal will weaken the competitive rivalry between Microsoft’s Xbox and Sony’s PlayStation, resulting in ‘higher prices, reduced range, lower quality, and worse service in gaming consoles over time.’
Commenting on the ruling , Martin Coleman, who chaired the investigation, said:
‘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.’
The ruling is not final, and the CMA has said that there are possible remedies Microsoft can take to allay competition concerns. One suggestion is to sell off the part of the business that makes Call of Duty, or the whole Activision arm of Activision Blizzard.
Microsoft’s plans are part of broader trend of consolidation in the gaming industry , with large tech companies buying up smaller studios. Critics fear that companies could move to make titles exclusive to their consoles, as Microsoft has done with several previous acquisitions.
The deal is also under scrutiny in the EU and the US, with the European Commission and the Federal Trade Commission (FTC) currently investigating it. The FTC is seeking to block the deal, citing similar concerns to the CMA, while the EU has reportedly issued an antitrust warning against Microsoft.
It now looks increasingly unlikely that the takeover will go ahead in its current form. Microsoft may need to make concessions to soothe the authorities and get the deal over the line.
