Xbox’s Activision takeover could ‘harm gamers’, UK warns

Microsoft could limit availability of Call of Duty series – and hurt both PlayStation and players in doing so, regulator warns

MICROSOFT-ACTIVISION BLIZZARD (AP)

Microsoft’s attempt to buy Call of Duty developer Activision could “harm UK gamers”, the UK’s regulator has said.

An in-depth investigation of the deal has suggested that it could result in “higher prices, fewer choices, or less innovation for UK gamers”, the Competition and Markets Authority (CMA) said. It could substantially reduce competition between Xbox and PlayStation and thereby harm players, it warned.

The company did not call outright for the takeover to be stopped. But it has sent its concerns to the parties involved, and has called on them to suggest potential remedies for the problems, it said.

Microsoft offered to buy Activision for $68.7 billion, in January 2022, in what is the largest video game acquisition ever as well as Microsoft’s biggest acquisition in history.

Since then, regulators in the UK, Europe, the US and elsewhere have opened probes into the deal, amid fears that it could harm competition. Those regulators have been encouraged by PlayStation, which has said that its business could be damaged if Xbox were to get the exclusive rights to games like Call of Duty.

The CMA echoed those concerns, warning that the deal would probably have detrimental consequences for players. The deal would reinforce Microsoft’s strong position, substantially reducing its competition, it said, which could “alter the future of gaming, potentially harming UK gamers”.

“It’s been estimated that there are around 45 million gamers in the UK, and people in the UK spend more on gaming than any other form of entertainment including music, movies, TV, and books. Strong competition between Xbox and PlayStation has defined the console gaming market over the last 20 years. Exciting new developments in cloud gaming are giving gamers even more choice,” said Martin Coleman, chair of the independent panel of experts who conducted the investigation.

“Our job is to make sure that UK gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation. We have provisionally found that this may be the case here.

“We have also today sent the companies an explanation of how our concerns might be resolved, inviting their views and any alternative proposals they wish to submit.”

Microsoft has repeatedly committed to make Call of Duty – Activision’s most popular offering and one of the biggesttgames in the world – available on PlayStation as well as Xbox for at least 10 years. But the CMA said that it had seen evidence that suggests that it would be “commercially beneficial” to make the game only available on its own consoles, or limit availability the PlayStation.

It said that Microsoft had pursued the strategy of “of buying gaming studios and making their content exclusive” in its purchases of other developers.

Microsoft said that it is “committed to offering effective and easily enforceable solutions that address the CMA’s concerns”.

“Our commitment to grant long term 100 per cent 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. 75 per cent of respondents to the CMA‘s public consultation agree that this deal is good for competition in UK gaming,” said Rima Alaily, Microsoft corporate vice president and deputy general counsel.

It stressed that the commitment to equality for Call of Duty on other platforms would mean parity in terms of “content”, “pricing”, “features”, “quality” and “playability” for 10 years.

The CMA asked interested parties to submit possible fixes for the problems by 22 February. It will consider those before making a final report on the deal by 26 April.