While the hurdles are not over yet, the update by the British CMA about the acquisition of Activision Blizzard King represents a new, very important step forward for Microsoft, which is now convincing more and more institutions.
The UK Competition and Markets Authority said it had narrowed the scope of his concerns about the deal, which means that, although some doubts remain, the institution is more inclined to approve the acquisition. The main concerns are now limited to the cloud gaming area.
The CMA said in a press release that it has received a “significant amount of new evidence” and based on this, together with careful consideration of a wide range of other information, the Panel now considers, tentatively, that the deal between Microsoft and Activision shouldn’t be so problematic in the UK.
“The CMA Investigation Panel has updated its interim findings and has reached the interim conclusion that, overall, the transaction will not result in a material decrease in competition in relation to console games in the UK”the group said.
“While the original CMA analysis indicated that this strategy would be profitable under most scenarios, the new data (which provides a better understanding of the actual buying behavior of CoD players) indicates that this strategy would be significantly loss-making under any scenario. plausible scenario”the agency continued. “On this basis, the updated analysis now shows that it would not be commercially viable for Microsoft to make CoD an Xbox exclusive after the deal, but that Microsoft will still have the incentive to continue making the game available on PlayStation.”
As mentioned, the CMA reveals that some important concerns remain regarding the cloud gaming space. The agency will continue to monitor this sector, with the final report due on 26 April 2023.
CMA investigator Martin Coleman said: “The interim results are a key aspect of the merger process and are explicitly designed to give the companies involved and any interested third parties a chance to respond with new evidence before making a final decision.”
Coleman added:
After considering the additional evidence provided, we have now tentatively concluded that the merger will not result in a material decrease in competition in console gaming services because the cost to Microsoft of retaining Call of Duty from PlayStation would outweigh any gains from acquiring that share . Our tentative view that this deal raises concerns in the cloud gaming market is unaffected by today’s announcement. Our investigation remains pending for completion by the end of April.
Recall that Microsoft is now awaiting the results of the EU commissions and the legal confrontation with the FTC in America, which has openly declared itself against the takeover.
Activision Blizzard King and Microsoft – The history
One year ago, in January 2022, Microsoft has announced that it will acquire Activision Blizzard King for a figure of around 69 billion dollars, starting a chain of events which, predictably, involved antitrust agencies from all over the world.
The reason is quite obvious: with this maxi-acquisition, Microsoft would come into possession of very important brands such as Call of Duty, Warcraft and Candy Crush, as well as obviously all the other IPs of the American company.
The discussion has been going on for months and months, with Sony and Microsoft directly involved by the antitrust to try to outline what are the potential consequences of this acquisition, and we have witnessed quite sensational declarations on several occasions. For example, Sony had revealed that it had proposed PlayStation Plus on Xbox platforms, then trying to establish conditions to give its ok to the acquisition.
As of January 2023, according to reports by Bloomberg, Nvidia and Google have also moved to the side of the FTC expressing doubts and perplexities regarding this colossal acquisition, and even the European Union seems directed to take sides against the current conditions of the acquisition. The British CMA, at the beginning of February, then released a first official response to the acquisition, suggesting to Microsoft that in order to get the green light it will have to limit the effects of this agreement – one of the suggested possibilities is to sell the Call franchise of Duty.
In February, after the first analysis, the UK body also reported that three major rivals of Xbox have officially spoken out against the acquisition. PlayStation boss Jim Ryan specifically said he wanted to block the acquisition, and Brad Smith said talks with Sony have been halted. Even, Microsoft has advised PlayStation to find new alternatives to COD.
During the same month, however, Microsoft announced some important agreements with Nintendo, Nvidia, Boosteroid and Ubitus, to bring Xbox and Activision titles to cloud gaming platforms and services. According to analysts, these agreements have brought a new wave of optimism also in the regulatory bodies, which could now welcome the acquisition with much more condescension. The EU postponed its final decision by a few weeks.
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