Back in July, the UK Competition and Markets Authority (CMA) began its investigation of Microsoft's $68.7 billion acquisition of Activison Blizzard. A successful acquisition along with regulatory approval would see Microsoft bring multiple franchises into its portfolio such as Overwatch, Diablo, Call of Duty, World of Warcraft, Candy Crush, Starcraft, and more. The deal has already been approved in Saudi Arabia. However, Microsoft has not been so fortunate in the UK as the CMA has cited major concerns with the deal.
The CMA has stated that the deal is anti-competitive in nature as it could result in Microsoft restricting access to popular multi-platform franchises such as Call of Duty only on its own platform or offering it on other platforms at "much worse terms".
The regulator also claims that Microsoft is a strong contender in the cloud gaming space and having these franchises under its portfolio could also directly harm competition in the evolving cloud gaming market.
As such, the CMA has ordered a Phase 2 investigation of the deal if Microsoft fails to resolve its antitrust fears within five working days. A Phase 2 investigation is quite detailed and is led by an independent panel of experts. Sorcha O'Carroll, Senior Director of Mergers at the CMA, is quoted as saying:
Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming.
If our current concerns are not addressed, we plan to explore this deal in an in-depth Phase 2 investigation to reach a decision that works in the interests of UK gamers and businesses.
Phase 2 is considerably more lengthy and detailed process and also involves an in-depth review of internal documents of both Microsoft and Activision Blizzard to see how they view the competition.
Microsoft's CEO of Gaming Phil Spencer has also published an early and public response to the CMA, saying that the Redmond tech firm actually plans to bring Activision's titles to more players by making them available on Game Pass. The executive has noted that:
In addition, we hope that players will be eager to play traditional console games from Activision Blizzard on other platforms via our cloud game streaming technology. This promises to open up mobile gaming, creating new distribution opportunities for game developers outside of mobile app stores while delivering compelling and immersive experiences for players by using the power of the cloud. And we can extend the joy of playing to devices that people already own, including Smart TVs and laptops.
Spencer has emphasized that Call of Duty titles will launch on PlayStation on the same day as Xbox and that there will be no differences between the two versions. It has cited its acquisition of Mojang in 2014 which hasn't restricted Minecraft from being available on all platforms. It's clear that Microsoft wants to take the fight to the CMA, but it's unclear right now if the UK regulator will be satisfied with the tech giant's responses.
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