Microsoft asserts that “solutions” will be developed in response to the CMA’s competition concerns, while the developer of Call of Duty claims the CMA does not comprehend the game sector.
The United Kingdom’s competition watchdog has moved closer to blocking Microsoft’s planned $69bn (£56bn) acquisition of Call of Duty gaming company Activision.
The Competition and Markets Authority (CMA) stated in a provisional judgment that the proposed merger could result in higher costs, fewer options, and less innovation for UK gamers.
Activision reacted by asserting that the regulator lacked market knowledge.
More than a year ago, Microsoft announced a massive transaction to boost its Xbox gaming business.
Large technology businesses are focusing on subscribers as ad sales become less reliable.
However, Microsoft’s policy has been faced with several protests from competitors, such as Sony, and global regulators.
The US Federal Trade Commission (FTC) has scheduled an August hearing to halt the purchase on competition grounds.
After deciding more research was needed, the CMA began its in-depth examination in September.
The regulator stated on Wednesday that it had allowed both parties to address its concerns through potential remedies. Before making a final judgment that might result in the transaction being banned.
This would be announced by April 26, according to the statement.
It described: “The CMA has provisionally determined that blocking access to Activision’s games by other platforms would considerably diminish competition between Xbox and (Sony) PlayStation in the UK, so affecting UK gamers.
“Xbox and PlayStation are in close rivalry, and access to the most important material, like Call of Duty, is critical.
“Reducing this rivalry between Microsoft and Sony could result in higher costs. A smaller selection, less quality, and worse service for all gamers over time.”
There are an estimated 45 million gamers in the UK,” said CMA inquiry panel chairman Martin Coleman. And more money is spent on gaming than on any other kind of entertainment, including music, movies, television, and literature.
“In the last two decades, the console gaming business has been dominated by Xbox and PlayStation’s intense rivalry.
“Exciting new advances in cloud gaming are expanding the options available to players.
“It is our responsibility to ensure that UK gamers are not caught in the crossfire of worldwide partnerships that, over time, could harm competition and lead to higher pricing, fewer options, or less innovation.
We have determined that this may be the case in this instance.
Microsoft and Activision had until February 22 to submit their CMA-proposed remedies.
Microsoft has continuously deflected the criticism of regulators, but it has agreed to provide Call of Duty. The popular first-person shooter series, to Nintendo and Sony platforms for a period of ten years.
According to Microsoft, it amounted to a decade of parity on all fronts, including content, pricing, playability, and quality.
Activision assured its employees that “the law and the facts are on our side.”
It responded, “We hope that between now and April, we will be able to assist the CMA in gaining a better understanding of our industry so that they can fulfill their stated mission of promoting an environment where people can be confident they are getting great choices and fair deals, where competitive, honest businesses can innovate and thrive, and where the entire UK economy can grow productively and sustainably.”
Microsoft’s corporate vice president, Rima Alaily, stated: “We are committed to providing the CMA with solutions that are both effective and easily enforceable.
“Our promise to provide 100% equal access to Call of Duty over the long term to Sony, Nintendo, Steam, and others preserves the deal’s advantages for gamers and developers and encourages market competition.
“Seventy-five percent of respondents to the CMA’s public consultation agree that this transaction is beneficial for UK gaming competition.”
