• News

Microsoft calls UK regulator concerns over Activision Blizzard deal misplaced

The UK's CMA detailed concerns about game availability and subscriptions to which it feels the Activision Blizzard (ATVI) deal poses a threat.

TJ Denzer

October 12, 2022 11:15 AM

Image via Microsoft

8

As Microsoft (MSFT) and Activision Blizzard (ATVI) continue to work towards closing a deal that would see Microsoft acquire the Call of Duty and Overwatch company, the United Kingdom’s Competition and Markets Authority is one of the few things that presents problems for the deal going through. The CMA has voiced concerns in addition to not allowing the Activision Blizzard deal to pass initial approval, concerns of which Microsoft has criticized as misplaced.

The CMA’s concerns and Microsoft’s response to them were detailed in a recent report from Eurogamer. After the initial approval phase failed, the deal will go on to a second phase, which Microsoft claims is uncalled for. Subscriptions were a core element of the CMA’s reservations about the deal, claiming Microsoft’s acquisition of Activision Blizzard may dissuade the availability of games on services outside of the Xbox, Windows, and Game Pass ecosystem.

“The CMA recognizes that ABK's newest games are not currently available on any subscription service on the day of release but considers that this may change as subscription services continue to grow,” representatives of the CMA wrote. “After the Merger, Microsoft would gain control of this important input and could use it to harm the competitiveness of its rivals.”

To this, Microsoft representatives responded that the company doesn’t believe the CMA’s concerns are sufficient enough to warrant a Phase 2 for approval of the deal, specifically citing complaints from Sony over concern for the Call of Duty series.

“The suggestion that the incumbent market leader, with clear and enduring market power, could be foreclosed by the third largest provider as a result of losing access to one title is not credible,” Microsoft responded. Going on to say that Sony has enough market power to respond and adapt to the deal. “In short, Sony is not vulnerable to a hypothetical foreclosure strategy, and the Referral Decision incorrectly relies on self-serving statements by Sony which significantly exaggerate the importance of Call of Duty to it and neglect to account for Sony's clear ability to competitively respond.”

Microsoft’s acquisition of Activision Blizzard would not only give it control over Call of Duty, but also Overwatch, Warcraft, Diablo, Crash Bandicoot, and many other iconic gaming franchises. Parties were expecting to close the $68.7 billion USD deal by Spring 2023 at the latest. It will remain to be seen if the CMA continues to roadblock the merger’s progress.

TJ Denzer

Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.