Microsoft hit a major roadblock in its bid to acquire Activision Blizzard, as the UK Competition and Markets Authority (CMA) determined that the deal “could harm UK players”. For the deal to go through, the CWA is suggesting some major concessions, like divesting Activision Blizzard in the Call of Duty or Activision segments of its pre-acquisition business.
A notice of possible remedies The document asks Activision Blizzard to do one of three things if it doesn’t want the acquisition potentially prohibited.
- “Disposal of the business associated with Call of Duty.”
- “Disposal of the Activision segment of Activision Blizzard, Inc., which would include Call of Duty-related businesses.”
- “Disposal of the Activision segment and the Blizzard segment of Activision Blizzard Inc., which would include businesses associated with Call of Duty and World of Warcraft, among other titles.”
Basically, the CMA is very concerned that Microsoft has control of the business behind Call of Duty and wants it to relinquish that entirely. In a press releasethe CMA explains that it would be beneficial for Microsoft to make Activision games like Call of Duty exclusive to its own consoles and cloud services or for it to make versions of the game available on other platforms “materially worse”, despite Microsoft’s assertion that it would not.
“Strong competition between Xbox and PlayStation has defined the console gaming market for the past 20 years,” said Martin Coleman, chairman of an independent expert panel that conducted this CMA survey. “Exciting new developments in cloud gaming are giving gamers even more choice. Our job is to ensure that UK gamers are not caught in the crossfire of global deals which, over time, could harm their competition and lead to higher prices, less choice, or less innovation.We tentatively found that might be the case here.
Overall, this is not a positive development for Microsoft, which is already under scrutiny from regulators in Europe. and the United States. There’s now a better chance that this acquisition won’t go through or that either Microsoft or Activision Blizzard will make major concessions before it happens.