Microsoft/Activision deal could lead to competition issues

Microsoft/Activision deal could lead to competition issues
Microsoft/Activision deal could lead to competition issues

Microsoft is one of the Big 3 companies, along with Sony and Nintendo, that have dominated the game console market for the past 20 years with limited entry from new rivals. Activision Blizzard owns some of the best-selling and most recognizable game franchises in the world, such as Call of Duty and World of Warcraft. The CMA is concerned that if Microsoft buys Activision Blizzard, it could hurt rivals, including new and future entrants to the game, by denying them access to Activision Blizzard games or offering them access on much worse terms.

The CMA also received evidence of the potential impact of combining Activision Blizzard with Microsoft’s broader ecosystem. Microsoft already has a leading game console (Xbox), a leading cloud platform (Azure), and the leading PC operating system (Windows OS), all of which could be important to its success in cloud gaming. CMA is concerned that Microsoft is leveraging Activision Blizzard’s games as well as Microsoft’s strength in console, cloud and PC operating systems to hurt competition in the nascent market for cloud gaming services .

The CMA considers these concerns to warrant a full Phase 2 investigation. Microsoft and Activision Blizzard now have 5 business days to submit proposals to address the CMA’s concerns. If suitable proposals are not submitted, the matter will be referred for a Phase 2 investigation.

Phase 2 investigations allow a panel of independent experts to dig deeper into the risks identified in Phase 1.

Sorcha O’Carroll, Senior Director of Mergers at CMA, said:

Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in gaming services. multi-game subscription and cloud games.

If our current concerns are not resolved, we plan to explore this deal in a full Phase 2 investigation to reach a decision that works in the interests of UK players and businesses.

In Phase 2, the CMA appoints an independent panel to review the deal further and assess whether it is more likely than not that a substantial lessening of competition will occur as a result of the merger – a threshold higher than Phase 1. It builds on the work and evidence of Phase 1 with more third-party engagement through requests for information and the use of its statutory powers in internal document collection. In Phase 2, the CMA will also conduct a more in-depth review of the merging parties’ internal documents that show how they view the competition and the market.

For more information, head over to the Microsoft/Activision case page.

Notes to Editors

  1. For media enquiries, contact the CMA press office on 020 3738 6460 or [email protected]

  2. Under the Companies Act 2002 (the Act), the CMA has a duty to refer to Stage 2 if the CMA considers that it is or may be the case that a relevant merger situation has been created , or that any arrangements are being made or contemplated which, if implemented, will result in the creation of a relevant concentration situation; and the creation of this situation has caused, or is likely to cause, a substantial lessening of competition with any market or market in the United Kingdom for goods or services.

  3. Microsoft is a global technology company offering a wide range of products and services, with global revenue of nearly £125 billion last year. Since 2001, he has sold different generations of Xbox game consoles. Gamers typically download digital copies of games they want to play on Xbox from Microsoft’s Xbox Store. Microsoft also offers a multi-game subscription service, Xbox Game Pass, where gamers pay a monthly fee to access a library of games.

  4. Activision Blizzard is a game developer and publisher with global revenue of £6.3 billion last year. It develops popular gaming content for consoles, PC and mobile, which includes titles such as Call of Duty, World of Warcraft and Candy Crush.

  5. The Phase 1 investigation identified a realistic prospect of SLC (significant lessening of competition) in the following UK repositories: game consoles; multi-game subscription services; and cloud gaming services.

. accord microsoft activision might cause problems competition

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