Here we are, the UK authorities’ investigation has tentatively concluded that Microsoft’s proposed acquisition of Activision could lead to higher prices, less choice or less innovation for UK gamers. The CMA has just spoken on the subject, we explain everything to you.
the CMA is currently opposed to the acquisition of Activision
While the American antitrust authorities continue to want to block the takeover of Activision Blizzard by Microsoft, the CMA (United Kingdom) and Europe continue their investigations. And it is today that the British authority took the floor publicly to present its provisional report.
According to the CMA, its extensive independent investigation tentatively concludes that the deal raises concerns about cloud gaming and console gaming. “The merger could make Microsoft even stronger in the cloud gaming space, stifle competition in this growing market and hurt UK gamers who can’t afford expensive consoles.” »
In addition, the operation could also “harm UK gamers by weakening the important rivalry between Xbox and PlayStation consoles. »
What are the arguments of the CMA?
The CMA specifies that the investigation consisted of organizing on-site visits and hearings to hear directly from the leaders of Microsoft and Activision, analyzing more than 3 million internal documents from the two companies to understand their point of view on the market, commissioning an independent survey of UK gamers and gathering evidence from a range of other game console vendors, game publishers and cloud gaming service providers.
The CMA tentatively found that buying one of the world’s largest game publishers would reinforce that strong position and significantly reduce the competition Microsoft would otherwise face in the UK cloud gaming market. It could change the future of games and hurt UK gamers, especially those who can’t or won’t buy an expensive gaming console or PC.
As for the console market, the regulator says it has found that “a small number of key games, including Call of Duty (CoD), Activision’s flagship game, play an important role in console competition. »
Evidence before the CMA, including data on how Microsoft measures customer value in the normal course of business, currently indicates that Microsoft would find commercial advantage in making Activision’s games exclusive to its own consoles (or only available on PlayStation under materially worse conditions). The CMA’s interim findings note that this strategy of buying game studios and making their content exclusive to Microsoft’s platforms has been used by Microsoft following several previous game studio acquisitions.
Martin Coleman, Chairman of the Independent Expert Panel commissioned to conduct this Phase 2 investigation, said, “Strong competition between Xbox and PlayStation has defined the gaming console market for the past 20 years. »
Our mission is to ensure that UK players are not caught in the crossfire of global deals which could ultimately harm competition and lead to higher prices, less choice or less innovation. We tentatively found that might be the case here.
We also today sent companies an explanation of how our concerns might be resolved, inviting them to let us know their views and any other proposals they would like to submit.
What is the next step?
These observations and arguments today give a provisional position of the British authorities on the takeover of Activision Blizzard King by Microsoft for nearly 70 billion dollars.
This is not a definitive conclusion since talks may still take place between Microsoft and the organization. Microsoft will most certainly have to make concessions to get the CMA on board, and we will continue to follow this case closely on Xboxygen. Microsoft and other parties have until March 1 to submit new considerations.
The CMA’s findings and final report are expected by April 26, 2023 after the body explained last January that delaying its final report was necessary in the face of a “large volume of evidence, as well as submissions from the main parties and some thirds. »
To understand everything about the takeover of Activision by Microsoft, the issues and the timetable, we invite you to consult our complete file on the subject, or the video summary below.
