The UK is softening its objections to Microsoft’s purchase of Activision Blizzard. The Competition and Markets Authority (CMA) has reviewed its findings and determined that the merger will not lead to significantly reduced competition in the console space. While the evidence remains the same, the watchdog now finds that Microsoft’s ownership of franchises like Call of Duty would “not materially affect” Sony’s ability to compete with PlayStation systems. Microsoft could “downgrade” the appeal of PlayStation, the CMA says, but Sony’s platform has a strong enough backlog that the damage is limited.
The Authority also reconsidered its opinion that Microsoft could benefit from excluding the PlayStation audience from Call of Duty. The latest data from Microsoft suggests the company could suffer substantial losses in “any plausible scenario” by making the game franchise Xbox-only or offering exclusive benefits, according to the CMA. In other words, not enough players are switching from PlayStation to Xbox for that strategy to work.
The CMA makes it clear that the updated findings do not change its concerns about cloud gaming services. In February, the regulator said Microsoft accounted for up to 70 percent of the global cloud gaming market, and completing the purchase of Activision Blizzard could hurt gamers who can’t afford an expensive console or PC.
We have asked Microsoft and Sony for feedback. Activision Blizzard tells Engadget in a statement that the CMA now has an “improved understanding” of the console market and that Microsoft already has fixes for the remaining issues. Activision maintains that Sony is only trying to “protect its dominance” by contesting the acquisition.
Sony has long opposed the deal, calling it a “threat to our industry” that could hurt the quality of Call of Duty on PlayStation. Microsoft has made a number of concessions in hopes of snapping up the Activision Blizzard acquisition, including 10-year multi-platform promises for Call of Duty, as well as deals to bring games to rival cloud platforms.
The UK supervisor’s change of heart does not overcome resistance to the merger in other countries. The US Federal Trade Commission is still suing to block the merger, noting that Microsoft made future titles like red drop Xbox exclusive on consoles despite assurances given to European Union officials. Objectors can also comment on the findings before the end of March. However, the new stance still improves Microsoft’s chances of completing the acquisition: a major regulatory body has just dropped its main point of contention.
