Discover more from The Shortcut
Microsoft's Activision Blizzard acquisition shouldn't include Call of Duty, says UK regulator
The CMA says the $69bn takeover could harm gamers and wants Call of Duty to be excluded from the deal
The UK’s Competition and Markets Authority (CMA) has expressed its concern surrounding Microsoft’s Activision Blizzard acquisition, suggesting the deal could harm gamers.
The CMA believes Microsoft could use the deal to reduce competition in the console and cloud gaming space and has proposed that Call of Duty is removed from the deal as a concession.
➡️ The Shortcut Skinny: UK CMA opposes the deal
👎 The CMA isn’t keen on Microsoft’s Activision Blizzard takeover
🤕 It says the deal could harm UK gamers in several ways
🚫 The CMA wants Microsoft to not include Call of Duty in the deal
📆 The final report from the CMA’s findings is due April 26
The CMA argues that the acquisition “could result in higher prices, reduced range, lower quality, [worse] service and/or reduced innovation” (thanks, GamesIndustry.biz).
To get the deal done, the CMA proposed that Microsoft could sell off the part of Activision Blizzard that deals with Call of Duty (the Activision segment of Activision Blizzard) or sell both the Activision and the Blizzard segments.
If the latter suggestion is agreed to, that would leave Microsoft with the mobile publisher King and little else. The CMA also provided another solution: call off the merger altogether.
The UK’s competition regulator has invited interested parties to respond to its proposed remedies by February 22, and it will share those findings on March 1. The CMA’s final report is due by April 26.
In a statement to VGC, Microsoft corporate vice president and deputy general counsel Rima Alaily said: “We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns.”
Alaily went on to reiterate Microsoft’s commitment to keeping Call of Duty on other platforms like Nintendo, Steam and PlayStation.
“Our commitment to grant long-term 100% equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market.”
Alaily highlighted that “75% of respondents to the CMA’s public consultation agree that this deal is good for competition in UK gaming” but that hasn’t dissuaded the CMA from reaching its provisional findings.
A confusing conclusion
The CMA’s conclusion is admittedly a confusing one. It doesn’t take much research to discover that the PS5 is the market leader, particularly in the UK. Sony used that position to raise the price of the console in August last year – something which Microsoft has yet to do – and console sales have seemingly been unaffected.
First-party PS5 games also cost $70, and have been since the PlayStation 5 launched in November 2020. Microsoft recently followed suit and matched Sony’s pricing policy, however, those who subscribe to Xbox Game Pass can get access to first-party games as part of their monthly subscription fee. Sony doesn't release its first-party games on PlayStation Plus Premium and Extra until many months and sometimes even years after they’ve launched.
Furthermore, Microsoft’s games are available to play on more platforms. Xbox titles launch on consoles, PC and often the cloud thanks to Xbox Cloud Gaming, while Sony’s titles have only just started to trickle over to PC.
Lastly, and perhaps most damningly, Sony has had an exclusive partnership with Call of Duty which has offered early access, content and perks for PlayStation players. To suggest Microsoft would be wrong to do the same flies in the very face of what Sony has been doing since the PlayStation 4. It’s no surprise that Call of Duty: Modern Warfare 2 was the most downloaded PS5 game in 2022.
Ahead of the CMA’s announcement, Activision Blizzard CEO Bobby Kotick accused Sony of “trying to sabotage” the deal, and thinks the UK government isn’t doing the country a disservice by not helping the takeover go through. However, he still believes the acquisition will be successful.
The Shortcut is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.