The $69 billion acquisition of Activision Blizzard by Microsoft Corp. could hurt competition in gaming consoles, subscription services, and cloud gaming, according to Britain's antitrust authority, who urged further investigation.
The largest gaming transaction ever could hurt the industry, according to the Competition and Markets Authority (CMA), if Microsoft forbids competitors from playing Activision's top-grossing games.
The CMA expressed worry that Microsoft would use its post-merger dominance over well-known games like "Call of Duty" and "World of Warcraft" to hurt competitors, including current and potential adversaries in multi-game subscription services and cloud gaming.
For the past 20 years, Microsoft has dominated the console market with Xbox, followed by its competitors Sony and Nintendo. rivals, the CMA said.
"We want people to have more access to games, not less," Microsoft President and Vice Chair Brad Smith said.
Sony, the market leader, claims to be concerned about "Call of Duty," but we have stated that we are dedicated to make the same game accessible on both Xbox and PlayStation on the same day, he said.
It was unsurprising, according to a number of analysts, and the agreement wouldn't be anti-competitive if rivals could play Microsoft games, as Microsoft has promised.
According to Atlantic Equities analyst Kunaal Malde, Microsoft needs to be more precise about exclusivity and provide more assurances.
Activision is still anticipating a closing within Microsoft's fiscal year, which ends in June 2023. To resolve the CMA's concerns, the corporations have until September 8 to submit their suggestions.
Microsoft's stock price fell 1.2%.
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The deal, which was unveiled in January, needs to receive clearance from the US as well as other important nations including the EU and China.
According to a source familiar with the situation, Reuters earlier reported that Microsoft would pay a $3 billion break-fee if the purchase fell through, indicating the business was confident in receiving antitrust approval.
Microsoft, according to the CMA, is well-positioned to thrive in cloud gaming given its possession of Xbox, Azure, the top PC operating system, and Windows OS.
