Microsoft Activision deal wins in the UK

One of the biggest hurdles in the way of Microsoft’s $69 billion acquisition of Activision Blizzard appears to have eased as UK regulators announced an interim conclusion that the acquisition would not harm competition.

The UK’s Competition and Markets Authority had previously been skeptical of Microsoft’s promises to keep the “Call of Duty” military shooter franchise on PlayStation consoles for years to come.

At the time, they indicated that Xbox may have a financial incentive to pull the blockbuster series from the platform in the future. Now though they’ve received more detailed information about “Call of Duty” player spending.

Results? Making the “Call of Duty” game series exclusive to Xbox would lose Microsoft so much money that there is no incentive for them to do so. The Capital Markets Authority says in a press release:

The CMA Investigative Group has updated its interim findings and has come to the provisional conclusion that overall the deal will not significantly reduce competition in terms of console gaming in the UK.

While the CMA’s original analysis indicated that this strategy would be profitable under most scenarios, the new data (which provides better insight into CoD players’ actual buying behavior) indicates that this strategy would be a huge loss under any plausible scenario.

On that basis, the updated analysis now shows that it would not be commercially beneficial for Microsoft to make CoD exclusive to Xbox after the deal, but that Microsoft would instead have an incentive to continue making the game available on PlayStation.”

The agency is said to still be investigating the cloud gaming aspect of the acquisition. The final judgment will not be due for another four weeks.

Microsoft has been busy in recent months striking deals with smaller competitors to ensure that first-party games will be available on other services outside of Xbox to help seal the deal.

The obvious question is what will be the final arrangement between Microsoft and Sony. Previously, Microsoft was offering Sony a ten-year deal that would see the ‘Duty’ franchise available on the console for the entire life of the PS5 and virtually all of the potential life of the PS6 should the console’s usual seven-year refresh cycle continue.

One thing to specify is the availability of Activision Blizzard games on Sony’s Game Pass competitor PlayStation Plus.

Microsoft also still needs to get approval from European regulators and deal with an antitrust lawsuit by the US Federal Trade Commission. However, shares in Activision have already surged towards the news — hitting some of their highest numbers in months.

source: Kotaku