The UK CMA did not make Microsoft, Activision Blizzard King, or the public, wait too long, as they have just released their provisional decision regarding the proposed merger of the two companies.
As reported by Video Games Chronicle, the CMA objects to the merger. They have also particularly noted the adverse effect this acquisition will have to console gaming and cloud gaming.
The CMA have clearly accepted Sony’s argument about Call of Duty, stating:
“Xbox and PlayStation compete closely with each other at present and access to the most important content, like Call of Duty, is an important part of that competition.
Reducing this competition between Microsoft and Sony could result in all gamers seeing higher prices, reduced range, lower quality, and worse service in gaming consoles over time.”
The CMA has also proposed a “partial divestiture of Activision Blizzard” as a path forward to allowing the deal to push through. This could mean removing both the Activision and Blizzard segments of the company, removing only the Activision segment of the company, or keeping Activision, but allowing Call of Duty to spin off as its own company dedicated to the franchise.
However, the CMA is also open to other proposals from Microsoft, as well as other third parties. This includes the ten year deal to keep Call of Duty on rival platforms like Sony, Nintendo, and Steam.
Microsoft has indicated that their intention with purchasing Activision Blizzard King is to leverage their properties for mobile games, not necessarily consoles. They will fight to keep Call of Duty, because the franchise is also part of their mobile gaming plans.
The CMA’s schedule has now sped up considerably. It will take proposals from all the parties involved by Februaru 22, 2023, and will accept all responses by March 1, 2023. They will release their final report on April 26, 2023.
Microsoft corporate vice president and deputy general counsel Rima Alaily shared this response:
“We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns.
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.
75% of respondents to the CMA‘s public consultation agree that this deal is good for competition in UK gaming.”
Reiterating the “100% equal access claim. What does 100% mean? When we say equal, we mean equal. 10 years of parity. On content. On pricing. On features. On quality. On playability.”
Activision Blizzard King has shared this statement to the public:
“These are provisional findings, which means the CMA sets forth its concerns in writing, and both parties have a chance to respond.
We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals, where competitive, fair-dealing business can innovate and thrive, and where the whole UK economy can grow productively and sustainably.”
