When news broke last week that the European Union is getting ready to approve Microsoft’s $68.7 acquisition of Activision Blizzard without any major divestment of assets (e.g., the sale of the Call of Duty IP to a third party), it looked like the biggest deal ever attempted in the gaming industry had a solid chance of passing through the regulatory hurdles.
Usually, the main regulators (EU, UK’s CMA, and the US FTC) tend to fall in line with each other’s decisions. However, Equity Report gathered information that the UK’s Competition and Markets Authority is prepared to diverge from the European Union’s decision. That doesn’t necessarily mean they will, but they could do so, according to sources familiar with the matter. At this point, it’s hard to say if this is simply the CMA asserting its independence or if they are really leaning toward blocking the deal.
The CMA first began scrutinizing the deal in July 2022. A couple of months later, the UK’s regulatory body shared its preliminary verdict that the deal could potentially lead to competition concerns. That prompted an even deeper investigation whose provisional findings published last month were that if Microsoft were allowed to complete the deal as is, UK gamers would be at risk of getting ‘higher prices’ or ‘less choices’.
However, at that time, the CMA still hadn’t considered remedies proposed by Microsoft, such as the 10-year full parity deal for Call of Duty offered to Nintendo (which happily signed) and Sony (which did not sign). Moreover, one of the key concerns relayed by the UK’s regulatory body was the potential for Microsoft to foreclose competitors in the budding cloud gaming market. Microsoft has since taken steps to allay those fears, including a deal with NVIDIA to bring all of its games (including Activision Blizzard’s if the deal goes through) to GeForce NOW.
For its part, Sony is still fighting fiercely against the deal. In new documents submitted to the CMA, the company said Microsoft could purposely release a broken version of Call of Duty on PlayStation platforms to lead consumers to abandon them in favor of Xbox. Sony also complained that the pricing terms of getting Call of Duty on its PlayStation Plus service (to counter a potential inclusion on Game Pass) would destroy its subscription business model.
On the other hand, even Activision Blizzard is heavily invested in getting this deal approved. Lulu Cheng Meservey (Executive VP of Corporate Affairs and CCO of Activision Blizzard) tweeted a rather explosive tidbit yesterday, quoting a statement reportedly made by SIE CEO Jim Ryan at a recent hearing with the EU in Brussels.
The CEO of SIE answered that question in Brussels.
In his words:
“I don’t want a new Call of Duty deal. I just want to block your merger.”
— Lulu Cheng Meservey (@lulumeservey) March 8, 2023
The post Microsoft/Activision Blizzard Deal Might Still Be Blocked by UK’s CMA Even if EU Approves It by Alessio Palumbo appeared first on Wccftech.
