© Reuters. FILE PHOTO: The Microsoft logo is seen on a smartphone positioned on the Activision Blizzard logo shown in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/
By Paul Sandle
LONDON (Reuters) – Britain put another hurdle in the way of Microsoft’s (NASDAQ:) $69 billion mega-buy of “Call of Duty” maker Activision Blizzard (NASDAQ:), saying it could harm gamers by weaken the rivalry between Xbox and sony (NYSE:)’s PlayStation.
The Competition and Markets Authority (CMA) said on Wednesday that the biggest deal in gaming history, announced a year ago, could result in higher prices, fewer choices and less innovation for millions of gamers. , as well as stifling competition in cloud gaming.
He said Activision’s flagship “Call of Duty” franchise was important in boosting competition between consoles, and Microsoft could benefit from making the game exclusive to Xbox, or only available on PlayStation on materially worse terms.
The deal is under scrutiny in the United States and Europe, as well as Britain, where the CMA showed its willingness to take on big tech in 2021 when it blocked Facebook owner Meta’s takeover of Giphy.
In December, the United States moved to block the deal, citing Microsoft’s track record of hoarding valuable game content. The Federal Trade Commission set a hearing before a judge for August of this year.
The EU is also preparing a statement of objections to the deal, sources told Reuters last month.
Microsoft has committed to keeping “Call of Duty” on PlayStation. The popularity of the first-person shooter franchise hasn’t waned nearly two decades after its release, with the latest installment achieving $1 billion in sales in its first 10 days in October.
But the American tech giant has said the deal is about more than “Call of Duty.”
It has said buying the company that also makes “Overwatch” and “Candy Crush” would boost its growth in mobile, PC and cloud gaming, as well as consoles, helping it compete with Tencent and Sony.
However, Sony led opposition to the deal, saying last year that it was “bad for competition, bad for the gaming industry and bad for gamers themselves.”
CROSSFIRE
CMA research chair Martin Coleman said his job was to make sure British players were not caught in the crossfire of global deals that could hurt competition and result in higher prices, less choice or less innovation.
“We have tentatively found that this may be the case here,” he said.
Activision shares fell 3% in early trading in New York. Microsoft, which announced an AI-powered revamp of its search capabilities on Tuesday, rose 2.4%.
Microsoft said it would address the CMA’s concerns.
“Our commitment to grant long-term 100% equal access to ‘Call of Duty’ to Sony, Nintendo, Steam and others preserves the benefits of the agreement for players and developers and increases competition in the marketplace,” said Rima, Vice President corporate and deputy general counsel. Alaily said.
The company emphasized that equality meant parity in content, pricing, features, quality, and gameplay for 10 years.
In December, it struck a 10-year deal to bring “Call of Duty” to Nintendo platforms, a move some analysts say was designed to put pressure on Sony.
Activision Blizzard said the CMA’s findings were provisional and that both parties had an opportunity to respond before issuing a final report on April 26.
“It is our hope that between now and April we can help the CMA better understand our industry to ensure that they can achieve their stated mandate of promoting an environment where people can be sure they are getting great options and fair deals, (and) where competition, fair business can innovate and prosper,” a spokesperson said.