Microsoft Corp.’s $69 billion offer to acquire Activision Blizzard Inc. would be subject to an in-depth evaluation unless the tech giant provides the funds to address the British watchdog’s concerns.
The Competition and Markets Authority on Thursday expressed concern that the markets for game consoles, multiplayer game subscriptions and cloud games have seen a significant drop in competition. The deadline for a government deal for Microsoft was Sept. 8.
Microsoft’s acquisition of Activision, whose properties include Call of Duty, World of Warcraft and the Guitar Hero series, would elevate the Xbox maker to a position as the third largest gaming company in the world and increase the number of games available to Game Pass members.
The CMA expressed concern in a statement that Microsoft could hurt competition in the burgeoning cloud sector by leveraging Activision’s games and its strengths in the console, cloud and PC operating system markets.
Senior director of mergers at the CMA, Sorcha O’Carroll, expressed concern that Microsoft could use its post-merger influence in popular games such as Call of Duty and World of Warcraft to undermine competitors, including current and future subscriptions to games and cloud games.
The British agency has become increasingly aggressive in recent negotiations, especially with major tech giants. When Microsoft announced its acquisition of Activision in January, it was the biggest acquisition in the history of the computer games industry.
“We’re ready to work with the CMA on the next steps and address any of its concerns,” said Brad Smith, Microsoft’s president and vice chairman. Sony, the market leader, says it is concerned about Call of Duty, but we promised that both Xbox and PlayStation would have access to the game on the same day.
As part of Thursday’s publication, Microsoft also included a letter from the company’s chief gaming officer, who provided an update on the regulatory investigation.
