UK agency recommends Xbox Activision deal for ‘in-depth investigation’ amid competition concerns | VGC

UK competition regulator inquiry at Xbox Game Studios (Microsoft) [2,160 articles]href =” https://www.videogameschronicle.com/companies/microsoft/ “> Microsoft’s proposed acquisition of Activision Blizzard [1,052 articles]href=”https://www.videogameschronicle.com/companies/activision-blizzard/”> Activision Blizzard may be expanded due to competition concerns.

The Competition and Markets Authority (CMA) confirmed last month that it had opened an investigation into the $68.7 billion deal – the gaming industry’s largest ever deal – to determine if it was fair.

After collecting comments from third parties interested in the proposed deal, the CMA said Thursday that it has a number of outstanding concerns that need to be addressed.

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After achieving Phase 1, we are concerned that Microsoft may use its control over popular games such as Call of Duty and World of Warcraft. [110 articles]“href=”https://www.videogameschronicle.com/games/world-of-warcraft/”> Post-World of Warcraft merger to damage adversaries, including new and future competitors in multiplayer subscription services and cloud games,” she said. Surcha O’Carroll, Director of Mergers at the Capital Markets Authority.

“If our current concerns are not addressed, we plan to explore this transaction in an in-depth Phase 2 investigation to arrive at a decision that works in the best interests of game players and businesses in the UK.”

The CMA said Microsoft and Activision Blizzard now have until September 8 to submit proposals that address its concerns, and that if the appropriate offers are not received, the deal will be referred for further investigation.

The Phase II investigation sees the CMA appoint an independent commission to examine the deals in more detail and assess whether they are likely to significantly reduce competition.

In summarizing the first phase of the investigation, the CMA said it was “concerned that if Microsoft did buy Activision Blizzard, it could harm competitors, including new and future game entrants, by denying them access to Activision Blizzard games or providing Access to much worse games. Reforms.”

She added, “The CMA has also received evidence about the potential impact of the combination of Activision Blizzard and Microsoft’s broader ecosystem. Microsoft already owns a leading gaming console (Xbox). [5,621 articles]”href=”https://www.videogameschronicle.com/platforms/xbox/ “>Xbox), the leading cloud platform (Azure) and the leading PC [6,093 articles]href=”https://www.videogameschronicle.com/platforms/pc/”> PC operating system (Windows OS), all of which may have been important to its success in cloud gaming.

“The CMA is concerned that Microsoft could leverage Activision Blizzard games combined with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the emerging market for cloud gaming services.”

UK watchdog recommends Xbox Activision deal for

In response to the CMA’s decision, Microsoft President and Vice President Brad Smith said: “We are ready to work with the CMA on next steps and address any of its concerns. Sony Interactive Entertainment [2,476 articles]”href=”https://www.videogameschronicle.com/companies/sony/”> Sony, as the industry leader, says it’s concerned about Call of Duty, but we’ve said we’re committed to making the same game available the same day on both Xbox and PlayStation [6,093 articles]”href =” https://www.videogameschronicle.com/platforms/playstation/ “> PlayStation. We want people to have more access to games, not less.”

In an interview with Bloomberg published last week, Xbox chief Phil Spencer expressed confidence in Microsoft’s progress toward its planned acquisition of Activision Blizzard — although he admitted he was in uncharted territory given the size of the deal.

The proposed acquisition is under scrutiny by multiple regulators amid concerns about potential antitrust issues during a period of increased consolidation in the gaming industry.

Spencer told Bloomberg, “I feel good about the progress we’ve made, but I go into the process supporting people who may not be close to the game industry asking good, hard questions about ‘What is our intention? What does this mean? If you run it over five years, does that restrict the market? Is a market growing?

“I’ve never done a $70 billion deal before, so I don’t know what my confidence means,” he added. “I will say that the discussions we had seem positive.”

Last week, it was said that Saudi Arabia became the first regulatory authority to approve Microsoft’s proposed acquisition of Activision Blizzard.

In a letter he sent to employees on Thursday, Activision Blizzard CEO Bobby Kotick [95 articles]href=”https://www.videogameschronicle.com/people/bobby-kotick/”> Bobby Kotick said the company would “continue to cooperate fully” with regulators in the UK and everywhere approvals are needed.

“While our industry continues to see many companies investing aggressively in gaming, including many of the world’s largest technology and media companies, government regulators are taking appropriate and deliberate steps to better understand our industry and the increasing competition from around the world.

“Starting in September, I will begin setting up town hall meetings to keep everyone informed of our continued progress toward our future as part of one of the most impressive companies in the world.”