UK Regulators Put Brakes on Microsoft’s Massive Gaming Acquisition

Microsoft’s plan to acquire video game developer Activision Blizzard has hit a roadblock, with the UK’s Competition and Markets Authority (CMA) announcing their opposition to the $69bn deal. The CMA has provisionally concluded that the acquisition would lead to higher prices, fewer choices, and less innovation in the gaming industry.

But Microsoft isn’t giving up without a fight, as they’ve promised to find solutions to address the CMA’s concerns. Rima Alaily, Microsoft’s corporate vice-president, even stated that 75% of respondents to the CMA’s public consultation agreed that the deal is good for competition in the UK gaming market.

However, the CMA’s findings are only provisional and both parties will have a chance to respond. Activision is hopeful that they will be able to help the CMA better understand their industry between now and April and promote an environment where fair-dealing businesses can thrive.

This week hasn’t been a great one for Microsoft, as the announcement of their AI Chatbot ChatGPT joining Bing was overshadowed by Google’s launch of its own rival, Bard. And now, the UK’s markets authority is throwing a wrench in their plans to acquire one of the world’s largest games publishers.

The CMA has suggested that Activision Blizzard could sell off one of its biggest assets, Call of Duty, to address the concerns. This would affect the value of the deal for Microsoft, but it might make Sony, who owns the PlayStation console, a little happier about their rival acquiring the creators of all the best games.

But Microsoft insists that it wouldn’t make existing games exclusive to the Xbox console. And let’s not forget, Activision Blizzard also owns the mobile game sensation, Candy Crush.

The provisional findings were the result of a five-month “phase-two” investigation led by an independent panel. The CMA found that a small number of key games, including Call of Duty, drive competition between consoles, and making Activision’s games exclusive to Xbox would benefit Microsoft but could result in higher prices and lower quality for gamers.

The CMA will now consider potential changes, including behavioral and structural remedies, but analysts believe that the chances of the deal completing have fallen. The deal is also facing scrutiny from regulators in the EU and US.

So, there you have it, a £57bn deal like this has never been seen in gaming’s history, and it looks like it’s going to be an exciting few weeks as Microsoft and Activision try to convince the CMA that this acquisition is a good thing for UK gamers.