The UK’s Competitors And Markets Authority (CMA) has shared its provisional findings into Microsoft’s acquisition of Activision Blizzard.

Final yr, Microsoft acquired Activision Blizzard in a deal that value roughly £50billion ($68billion USD). Nonetheless, the transfer has confronted ongoing criticism from quite a few regulatory our bodies and fans.

In September, the UK’s (CMA) voiced issues that the merger might “hurt rivals” and “harm competitors” within the gaming business following a probe it launched final summer season.

The regulatory physique has now shared its provisional conclusions to the investigation, and it’s not excellent news for Microsoft.

“A CMA investigation has provisionally concluded that Microsoft’s proposed acquisition of Activision may end in larger costs, fewer decisions, or much less innovation for UK avid gamers,” begins the report.

The five-month investigation noticed the CMA “hear straight from enterprise leaders at Microsoft and Activision, analyse over 3 million inner paperwork from the 2 companies to grasp their views in the marketplace, fee an unbiased survey of UK avid gamers, and collect proof from a variety of different gaming console suppliers, sport publishers, and cloud gaming service suppliers.”

The provisional report discovered “{that a} small variety of key video games, together with Name Of Responsibility, Activision’s flagship sport, play an essential function in driving competitors between consoles.”

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“This technique of shopping for gaming studios and making their content material unique to Microsoft’s platforms, has been utilized by Microsoft following a number of earlier acquisitions of video games studios,” it added.

The CMA went on to share fears that by Microsoft “shopping for one of many world’s most essential sport publishers” the corporate may “considerably cut back the competitors that Microsoft would in any other case face within the cloud gaming market within the UK.”

“This might alter the way forward for gaming, doubtlessly harming UK avid gamers, significantly those that can’t afford or don’t need to purchase an costly gaming console or gaming PC.”

“Microsoft already accounts for an estimated 60 – 70 per cent of world cloud gaming companies and likewise has different essential strengths in cloud gaming from proudly owning Xbox, the main PC working system (Home windows) and a worldwide cloud computing infrastructure (Azure and Xbox Cloud Gaming).”

Activision Blizzard
Activision Blizzard emblem on a cell phone. CREDIT: Alamy

At this stage within the investigation, the CMA has recognized two potential solutions.

The primary “potential structural treatment” can be for Microsoft to dump the a part of Activision Blizzard that offers with Name Of Responsibility. The second is that the CMA prohibits the merger.

The regulator went on to say it is going to contemplate “another practicable treatments” that Microsoft, or any third events, might suggest however they solely have till February 22 to submit these strategies forward of the CMA issuing its ultimate report by April 26.

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The CMA additionally mentioned it’s conscious of Microsoft’s promise to maintain Name Of Responsibility cross-platform, which is a possible resolution to their issues, however the regulator would like a structural resolution.

microsoft playstation subpeona
Microsoft in Cologne, Germany (CREDIT: philipus / Alamy Inventory Picture)

Following the provisional report, Microsoft launched an announcement that mentioned: “We’re dedicated to providing efficient and simply enforceable options that handle the CMA’s issues. Our dedication to grant long run 100 per cent equal entry to Name of Responsibility to Sony, Nintendo, Steam and others preserves the deal’s advantages to avid gamers and builders and will increase competitors out there. 75 per cent of respondents to the CMA‘s public session agree that this deal is sweet for competitors in UK gaming.”

Increasing on the “long run 100 per cent equal entry” promise, Microsoft mentioned: “After we say equal, we imply equal. 10 years of parity. On content material. On pricing. On options. On high quality. On playability.”

Modern Warfare 2
Name Of Responsibility: Fashionable Warfare 2. Credit score: Activision

Earlier this yr, it was reported that it was “probably” Microsoft would obtain an EU antitrust warning, with the European Fee drawing up its “assertion of objections” to the deal. These objections will should be addressed earlier than the deal can go forward.

However in November 2022 Microsoft confirmed it was set to supply “treatments” to EU antitrust regulators in response to their formal objections. The next month, North America’s Federal Commerce Fee (FTC) confirmed it too can be making an attempt to cease Microsoft’s takeover of Activision Blizzard.

Phil Spencer, Microsoft Gaming CEO, has claimed on a number of events that the corporate’s acquisition of Activision Blizzard is extra about cell gaming, relatively than proscribing AAA titles like COD whereas Activision Blizzard boss Bobby Kotick has claimed that blocking Microsoft’s acquisition would hurt the UK’s goal of turning into a know-how superpower.

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