UK’s competition authority says Microsoft Activision deal will harm gamers

As usual, Call of Duty remained the sticking point for authorities (Image Courtesy: Activision/Blizzard)

The Competition and Markets Authority (CMA) of United Kingdom has opposed Microsoft’s proposed buyout of Activision Blizzard on grounds that it will harm gamers and reduce innovation.

The regulator conducted a five-month investigation into the deal, to understand the potential impact it might have on the market. Based on the findings, the CMA said that the merger, “could make Microsoft even stronger in cloud gaming, stifling competition in this growing market and harming UK gamers who cannot afford expensive consoles.”

The authority explained this by saying Microsoft already accounts for 60-70 percent of global gaming cloud services and the deal (which will give them access to lucrative mobile franchises like Candy Crush) will hurt competition.

It also raised objections with Call of Duty. The lucrative gaming franchise is a big brand among gamers and its latest iteration (Call of Duty: Modern Warfare 2) earned $1 billion in revenue in just 10 days.

The CMA said that Microsoft could make the franchise exclusive to Xbox and PC or offer rival PlayStation, an inferior version of the game to boost its own sales.

Microsoft has stated on multiple occasions that it remains committed to keeping Call of Duty multi-platform, even signing a 10-year deal with Nintendo to bring the franchise to their platforms.

Sony, Microsoft’s rival in the console space, has so far turned down every deal offered to them, and is insistent on making life tough for Microsoft.

“The CMA provisionally found that weakening competition by restricting the access that other platforms have to Activision’s games could substantially reduce the competition between Xbox and PlayStation in the UK, in turn harming UK gamers,” The CMA wrote in its findings.

The authority stated that, “reducing this competition between Microsoft and Sony could result in all gamers seeing higher prices, reduced range, lower quality, and worse service in gaming consoles over time.”

In a statement shared with Engadget, Microsoft’s corporate VP and deputy general counsel Rima Alaily said the company was committed, “to offering effective and easily enforceable solutions that address the CMA’s concerns.”

“Our commitment to grant long term 100 percent 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 added.