UK watchdog recommends Xbox Activision deal for ‘in-depth investigation’ amid competition concerns

Inquiry the UK competition regulator in MicrosoftThe proposed acquisition of Activision Blizzard It may be expanded due to competition concerns.

The Competition and Markets Authority (CMA) confirmed last month that it had done so An investigation has been opened into the $68.7 billion deal—the biggest gaming industry ever — to determine if it’s fair.

After collecting comments from third parties interested in the proposed deal, the CMA said Thursday that it has a number of outstanding concerns that need to be addressed.

“After achieving Phase 1, we are concerned that Microsoft may use its control over popular games such as Call of Duty and world of cans Sorcha Ocarroll, Senior Director of Mergers at the CMA, said:

“If our current concerns are not addressed, we plan to explore this transaction in an in-depth Phase 2 investigation to arrive at a decision that works in the best interests of game players and businesses in the UK.”

The CMA said Microsoft and Activision Blizzard now have until September 8 to submit proposals that address its concerns, and that if the appropriate offers are not received, the deal will be referred for further investigation.

The Phase II investigation sees the CMA appoint an independent commission to examine the deals in more detail and assess whether they are likely to significantly reduce competition.

In summarizing the first phase of the investigation, the CMA said it was “concerned that if Microsoft did buy Activision Blizzard, it could harm competitors, including new and future game entrants, by denying them access to Activision Blizzard games or providing Access to much worse games. Reforms.”

She added, “The CMA has also received evidence about the potential impact of the combination of Activision Blizzard and Microsoft’s broader ecosystem. Microsoft already has a leading game console (X-Box), the leading cloud platform (Azure), and the leading computer operating system (Windows OS), all of which may be important to its success in cloud gaming.

“The CMA is concerned that Microsoft could leverage Activision Blizzard games combined with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the emerging market for cloud gaming services.”

In response to the CMA’s decision, Microsoft President and Vice President Brad Smith said: “We stand ready to work with the CMA on next steps and address any of its concerns. Sonyas the 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 Play Station. We want people to have more access to games, not less.”

In a Bloomberg interview published last week, the head of Xbox Phil Spencer expressed confidence in Microsoft’s progress towards its planned acquisition of Activision Blizzard – although he admitted he was in uncharted territory given the size of the deal.

The proposed acquisition is Checked by multiple regulators Amid concerns about potential antitrust issues during a period of increased consolidation in the gaming industry.

Spencer said Bloomberg: “I feel good about the progress we’ve made, but I go into the process supporting people who may not be close to the game industry asking good and hard questions about ‘What is our intention?’ What does this mean? If you run it over five years, does that restrict the market? Is a market growing?

“I’ve never done a $70 billion deal before, so I don’t know what my confidence means,” he added. “I will say that the discussions we had seem positive.”

It was said last week that Saudi Arabia became the first regulatory authority for Approval of Microsoft’s proposed acquisition of Activision Blizzard.

In a letter sent to employees Thursday, Activision Blizzard CEO Bobby Kotik He said the company would “continue to cooperate fully” with UK regulators and approvals are required everywhere.

“While our industry continues to see many companies investing aggressively in gaming, including many of the world’s largest technology and media companies, government regulators are taking appropriate and deliberate steps to better understand our industry and the increasing competition from around the world.

“Starting in September, I will begin setting up town hall meetings to keep everyone informed of our continued progress toward our future as part of one of the most impressive companies in the world.”