Microsoft’s $69bn Activision deal could hurt competition, UK says

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  • UK to further probe Microsoft-Activision merger
  • Deal could reduce competition on game consoles
  • Microsoft and Activision will cooperate with CMA

LONDON, Sept 1 (Reuters) – Britain’s antitrust regulator said Microsoft Corp’s (MSFT.O) $69 billion acquisition of “Call of Duty” maker Activision Blizzard could hurt competition in gaming consoles. games, subscription services and cloud games, and that it needs to be investigated. in depth.

The Competition and Markets Authority (CMA) said on Thursday the deal, the biggest ever in games, could hurt the industry if Microsoft refuses to give rivals access to games Activision’s best-selling.

“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 multi-game subscription services. and cloud gaming,” the CMA said. said.

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Microsoft, along with Xbox, and rivals Sony (6758.T) and Nintendo (7974.T) have dominated the console market for 20 years, with limited entry from new rivals, the CMA said.

“We want people to have more access to games, not less,” said Microsoft president and vice president Brad Smith.

“Sony, as an industry leader, says it’s worried about ‘Call of Duty’, but we said we’re committed to making the same game available the same day on Xbox and PlayStation,” said- he declared.

Several analysts called the move unsurprising and said the deal wouldn’t be anti-competitive if competitors had access to Microsoft games, as Microsoft promised.

Microsoft needs to provide more assurances and put some specifics about exclusivity in writing, said Atlantic Equities analyst Kunaal Malde.

Activision still expects the deal to close within Microsoft’s fiscal year to the end of June 2023. Companies have until September 8 to submit proposals to address AMC’s concerns .

Microsoft shares fell 1.2%.

CLOUD GAMES

The deal, which was announced in January, will require approval from the United States as well as other major jurisdictions, including the European Union and China.

Reuters had previously reported that Microsoft would pay a $3 billion severance fee if the deal fell through, according to a source familiar with the matter, suggesting the company was confident to seek antitrust approval. Read more

CMA said Microsoft is well positioned to succeed in cloud gaming, given that it has a leading cloud platform in Azure and the leading PC operating system Windows OS, as well as Xbox. .

He said those strengths, combined with Activision’s games, could hurt competition in the nascent market for cloud gaming services.

Microsoft said in a blog post Thursday that it will launch major Activision games on its Game Pass subscription service and also make them available on other consoles and mobile devices through cloud game streaming technology.

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Reporting by Radhika Anilkumar in Bengaluru and Paul Sandle in London, additional reporting by Sinchita Mitra and Akash Sriram; Editing by Arun Koyyur, David Goodman, Emelia Sithole-Matarise and Nick Zieminski

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