Back in July, the United Kingdom's Competition and Markets Authority (CMA) set up an inquiry into the Microsoft-Activision $68.7 billion merger. Recent developments reveal that the UK watchdog will be holding just another in-depth probe after the first phase of inquiry.
According to a July Tech Times report, the Enterprise Act 2002's merger rules will be invoked if the acquisition "would result in the development of a relevant merger scenario," according to the merger probe and if the buyout might potentially reduce market and competition in the UK.
UK Market Authority Sets Second Phase of Microsoft-Activision Probe
Furthermore, a recent press release from the UK competitions agency emphasizes that the Competition and Markets Authority worries that Microsoft acquiring Activision Blizzard can significantly diminish competition in gaming consoles, multi-game subscription services, and cloud gaming services and that the said industry could take a toll as it is comprised of less than a handful of major competitors.
Earlier today, Sept. 1, CMA concluded its first phase of inquiry with a verdict that the merger inquiry should continue with another stage of the investigation, citing the fact that the said acquisition meets the "threshold for reference to an in-depth phase 2 investigation."
In its decision, CMA reiterates that the multi-billion deal could harm the UK's tech market and give rise to a "realistic prospect of a substantial lessening of competition in gaming consoles."
Through its well-established Xbox platform, which has a sizable user base and a vast library of game material, Microsoft already enjoys a strong position in the gaming business. CMA is determined to point out that the merger will unfairly affect the company's close competition.
In keeping with the development of the gaming market, Microsoft has also been progressively enhancing its gaming ecosystem through the acquisition of independent game studios along with the expansion of its Game Pass subscription scheme, and the development of its cloud platform.
CMA also mentions that the merger can possibly bar rivals from accessing and distributing gaming titles like "Call of Duty." The phase one verdict says that evidence is "consistently pointed towards ABK's content, especially Call of Duty, as being important and capable of making a material difference to the success of rivals' gaming platforms."
It is clear from a story by Eurogamer that the CMA is actually referring to the possibility that the acquisition may hurt PlayStation sales, given that "Call of Duty" is a huge console title. The same report considers the fact that Sony and Activision have a multi-year deal in place to make the PlayStation the main platform for "Call of Duty."
Microsoft Gaming on the Activision Blizzard Acquisition
Despite CMA's continued scrutiny, Microsoft recently let out that "Call of Duty" will be joining its Xbox Game Pass soon. In a recent blog post by Microsoft exec Phil Spencer, the tech and gaming giant is committed to bringing its games to a wider audience.
Microsoft assured the public that the acquisition would not mean that games like "Call of Duty" would be removed from platforms where gamers used to play them. The exec emphasizes that they are "committed to making the same version of "Call of Duty" available on PlayStation on the same day the game launches elsewhere."
Microsoft and ABK have until Sept. 8 to submit an undertaking that the CMA could approve in relation to the investigation.
