Microsoft’s Activision purchase may harm competition: UK regulator

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Britain’s competition watchdog said the $69 billion purchase of “Call of Duty” maker Activision Blizzard Inc (NASDAQ: ATVI ) by Microsoft Corp (NASDAQ: MSFT ) could harm competition in consoles, subscription services and cloud gaming, so it needs to be investigated.

The Competition and Markets Authority (CMA) said on Thursday that the deal, the biggest in gaming history, could hurt the industry if Microsoft refuses to give competitors access to Activision’s best-selling titles.

“We are concerned that Microsoft may use its control over popular games like ‘Call of Duty’ and ‘World of Warcraft’ after the merger to harm competitors, including recent and future competitors in multi-game subscription services and online gaming. the cloud,” said the CMA.

Microsoft, with Xbox, and rivals Sony (TYO: 6758 ) and Nintendo (TYO: 7974 ) have dominated the console market for 20 years, with limited entry from new rivals, according to the CMA.

Both Microsoft and Activision said they will continue to cooperate with the CMA.

“Sony, as an industry leader, says it’s concerned about ‘Call of Duty,’ but we’ve said we’re committed to making the same game available on the same day on both Xbox and PlayStation,” said the president and vice president. Microsoft’s Brad Smith said in an emailed statement.

Activision still expects the deal to close in Microsoft’s fiscal year to June 30, 2023. Microsoft and Activision have until September 8 to respond to the CMA.

Microsoft had previously said a comprehensive review would build confidence in closing a deal that would be positive for the competition.

The company, which makes the Xbox video game console, announced the deal in January, saying gaming is “the most dynamic and exciting category in entertainment.” The deal will add franchises like “Overwatch,” “Candy Crush” and “World of Warcraft” to its business and make it a stronger competitor to Sony and Nintendo.

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