Activision Blizzard still "confident" about Microsoft deal, despite fresh UK regulator warnings
The CMA have provisionally concluded the deal "could harm UK gamers"
The UK’s Competition and Markets Authority (CMA) have released their provisional findings on Microsoft’s proposed Activision Blizzard acquisition, laying out their concerns with the $69 billion deal. The CMA say the buyout “could result in higher prices, fewer choices, or less innovation for UK gamers.” Since these concerns are provisional, both parties will have a chance to respond before the CMA makes its final decision on April 26th. Both Microsoft and Activision Blizzard believe the deal will encourage competition in the gaming space, rather than hinder it.
An Activision spokesperson says the company is hopeful they can “help the CMA better understand our industry.” They added that the deal would “promote an environment where people can be confident they are getting great choices and fair deals.”
Activision CEO Bobby Kotick echoed this sentiment in a memo to employees, saying “We are also confident that the law – and the facts – are on our side.” He continued, “In this case, our combined companies will bring more competition to an already crowded field of world-class gaming competitors,” pointing to Sony, Apple, and Amazon, among others.
Kotick added that ActiBlizzard’s giant IP and mobile expertise, combined with Microsoft’s distribution capabilities will enable more competition in the industry, not less. Either way, Kotick assured employees that the CMA’s findings are “a normal part of their evaluation process,” and that it “opens the door to discuss various commitments Microsoft can make.”
What commitments could Microsoft make? Well, late last year Microsoft offered Nintendo, Valve, and Sony a 10-year Call Of Duty deal, likely in an attempt to appease regulators. Nintendo accepted the deal, and Valve’s CEO Gabe Newell refused because he didn’t believe in “requiring any partner to have an agreement that locks them.” Sony also refused to sign, likely for very different reasons, as the two companies have been in a public back-and-forth for months.
Microsoft’s Corporate VP Rima Alaily reiterated that deal, saying “Our commitment to grant long term 100% equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market.” Microsoft say 100% equal means 10 years of parity on content, pricing, features, and playability for Call Of Duty. Despite Microsoft's parity deals, the CMA still provisionally concluded the deal would be "harmful to UK gamers."
The CMA isn’t the only regulatory body to raise concerns about Microsoft’s proposed deal. EU regulators already slapped MS with antitrust warnings, and the American FTC are currently moving to block the deal entirely. The FTC and CMA raised similar concerns, citing decreased competition in the console and cloud gaming markets.
At this rate, my weekly Microsft/ActiBlizzard updates are going to become daily. I'll need more popcorn for this soap opera.
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