The repurchase from Activision-Blizzard We still have a few surprises in store before we come to the end of this saga rich in twists and turns. If you haven’t been following everything, just note that the last major fact in this case was the decision of the FTC, which decided to get in the way of Microsoft with a lawsuit that would aim to block the takeover , or at least to oblige the manufacturer to make more or less significant concessions. The CMA, which is the regulatory authority of the United Kingdom, was undecided, as was the European Commission. This is why she had granted herself more time before rendering her verdict, but she published a first response today, which will certainly not help Microsoft.
The CMA is against the takeover, at least temporarily
In its report, the CMA expresses its fears about this takeover following its investigation, stating that this deal could harm consumers in several ways: both in the cloud area, and in the console sector.
For the first case, the CMA estimates that the Microsoft-owned catalog would be too powerful and completely dominate this cloud gaming market, knowing that it is already in a leading position, in particular thanks to the Azure service and Xbox Cloud Gaming. This would harm current and potential competition in this sector, which would be to the detriment of users.
As for the console market, the CMA finds that Xbox and PlayStation are fairly equal competitors, but that the acquisition of the license call of duty would unbalance this balance of power :
” Evidence suggests that after the merger, Microsoft would find it commercially advantageous to make Call of Duty exclusive to Xbox or available on Xbox under better terms than on PlayStation. We have tentatively found that this would significantly reduce competition in the game console market to the detriment of gamers – Xbox and PlayStation, which could lead to higher prices, reduced range, lower quality, poorer service and/or reduced innovation. »
Concerns that Microsoft has already addressed and the CMA knows it, since it refers to it by stating that even if call of duty remained on PlayStation consoles, users could be offered less choice than on Xbox, with for example new content (which Sony is currently doing with the license).
Moreover, the Bethesda case does not help Microsoft since the CMA indicates that the manufacturer has been engaged in a fairly aggressive takeover policy for a few years, and the games produced following these acquisitions have only been considered as exclusives. Despite the promises, the CMA thinks Microsoft could find a way to make call of duty exclusive to Xbox consoles, while making it worthwhile even without the PlayStation audience. Note also that the famous deal which offers competitors access to call of duty for 10 years is still being studied by the CMA.
Buy Activision without Call of Duty?
This is why the CMA is asking for stronger commitments from Microsoft. The British authority believes that this problem could be solved in three ways:
- The pure and simple ban on redemption
- A clear agreement between all the parties involved in the file
- The separation of part of the business from Activision
The first is clear, while the second therefore demanded that Sony find an agreement with Microsoft, just like Nvidia and the other companies which oppose this acquisition. For the third option, it’s a little more vague. According to Bloomberg, it could even mean to separate call of duty of Activision, or to separate Activision from Blizzard, leaving Microsoft simply to buy Blizzard (or simply King).
Remember that the decision of the CMA which is presented here is provisional and that other outcomes are obviously possible, depending on the concessions presented by Microsoft. It is broadcast publicly in order to allow time for the various actors in the case to respond to certain specific points, before the final verdict is rendered. But it must be understood that if the CMA opposes the takeover in the same way as the FTC, the European Commission could follow suit and greatly complicate Microsoft’s life.