The UK competition regulator’s investigation into Microsoft‘s proposed acquisition of Activision Blizzard has officially been expanded to a second phase.
Last week, the Competition and Markets Authority (CMA) said its inquiry into the $68.7 billion mergercould be referred for an “in-depth investigation”due to a number of antitrust concerns.
Notably, it said it was worried about the impact the dealcould have on PlayStation’s ability to compete, given that the deal would seeMicrosoftgain ownership of the Call of Duty series.
Update15th Sep 2022 / 4:04 pm
Sony has welcomed the newsthat the CMA is expanding its inquiry. It claims Microsoft controlling games like Call of Duty “would have major negative implications for gamers and the future of the gaming industry”.
Update 215th Sep 2022 / 5:21 pm
Microsoft has also responded to the CMA’s decision. A company spokesperson told VGC: “It makes zero business sense for Microsoft to remove Call of Duty fromPlayStationgiven its market leading console position.”
The CMA offered Microsoft the chance to submit proposals addressing its concerns, but it said on Thursday that the company had chosen not to do so at this stage.
Phase two of the CMA’s investigation has seen it appoint an independent panel to scrutinise the deal in further detail and evaluate if it’s more likely than not to result in a substantial lessening of competition.
It’s unclear how long the next phase of its inquiry might take, but VGC has contacted the CMA for further information.
“The CMA has referred the anticipated acquisition by Microsoft Corporation ofActivision Blizzard, Inc. for an in-depth investigation, on the basis that, on the information currently available to it, it is or may be the case that this Merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom,” the watchdog said on Thursday.
The proposed acquisition isbeing scrutinised by regulatorsaround the world amid concerns about antitrust issues during a time of increasing consolidation in the gaming industry.
According to aFinancial Timesreport published on Wednesday, regulators and others involved in the deal are alsoexpecting a lengthy EU probeonce Microsoft officially files its case in Brussels in the coming weeks.
“It is a big deal, a difficult deal,” a source said to be familiar with the transaction told the FT. “It needs an extensive investigation.”
Earlier this month,Microsoft provided some clarification on its plansfor the future of Call of Duty should the acquisition get the go ahead.
In a statement toThe Verge,XboxbossPhil Spencersaid Microsoft had committed to making the series available on PlayStation for “several more years” after Sony’s current marketing deal withActivisionexpires.
During this period, Call of Duty games released for PlayStation would have “feature and content parity”, Spencer said.
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Sony Interactive EntertainmentCEOJim Ryan, who is reportedly seeking access to future Call of Duty games on equal terms and in perpetuity, responded by calling Microsoft’s proposal for keeping the series on PlayStation consoles“inadequate on many levels”.
The current Call of Duty deal between Sony and Activision is believed to cover this year’s Modern Warfare 2 andWarzone 2, anda new game from Black Ops developer Treyarch, which may not arrive until 2024.
