Microsoft pleads for its Activision Blizzard deal as UK regulator signals an in-depth review

Microsoft is publicly advocating the passage of the Activision Blizzard deal, just as the UK’s Competition and Markets Authority (CMA) has expressed concerns. Microsoft surprised the gaming world earlier this year with its plans to acquire Activision Blizzard in a $68.7 billion deal, by far the largest ever in gaming. Now regulators are starting to notice.

The British CMA says: it is “concerned that Microsoft’s anticipated purchase of Activision Blizzard could significantly reduce competition on game consoles, multi-game subscription services and cloud gaming services.” After an initial investigation phase, the CMA says it will move to what it calls a Phase 2 investigation if Microsoft is unable to respond to its concerns within 5 business days.

During a Phase 2 investigation, an independent panel will examine Microsoft’s deal in more detail and whether control over games such as Duty and World of Warcraft will harm rivals. In response, Microsoft Gaming CEO and head of Xbox, Phil Spencer, outlined Microsoft’s position today in a blog post.

Image: Activision Blizzard

Spencer describes Microsoft’s plans for gaming beyond just Xbox consoles and says the company will follow a “path of principle” in its approach to Xbox Game Pass and Duty. Microsoft says it will make overwatch, diabloand Duty all available in Xbox Game Pass, but do not prevent games like Duty are no longer available on PlayStation.

“We heard that this deal franchises like Duty away from the places where people currently play them,” says Spencer. “Therefore, as we said before, we are committed to making the same version of Duty available on PlayStation the same day the game launches elsewhere.”

Spencer Compares Microsoft’s Activision Blizzard Deal to Microsoft’s $2.5 Billion Acquisition Minecraft. “We know players benefit from this approach because we’ve done it with” Minecraftwhich is still available on multiple platforms and has expanded to even more since Mojang joined Microsoft in 2014,” said Spencer.

Image: Microsoft

Microsoft has also previously argued that not distributing games like Duty at rival console stores “simply wouldn’t be profitable” for the company. In documents filed with Brazil’s Economic Defense Regulatory Agency (CADE), the company says a strategy of not distributing Activision Blizzard games on rival consoles would only be profitable if the games brought a large number of players to the Xbox. ecosystem could attract. in revenue to offset the losses by not selling these titles on competing consoles.

While the FTC, CMA and the European Commission are still analyzing Microsoft’s Activision Blizzard deal, Saudi Arabia became the first country to approve the acquisition last month. I understand that Microsoft still expects the deal to close in full in the spring of 2023, with many months ahead for competitors to voice their concerns and Microsoft to advocate for this massive acquisition. Spencer says he’s open and ready for the in-depth reviews ahead:

“We will continue to work with regulators in a spirit of transparency and openness in assessing this acquisition. We respect and welcome the difficult questions that are asked. Today’s gaming industry is robust and dynamic. Industry leaders, including Tencent and Sony, continue to expand their deep and extensive libraries of games, as well as other entertainment brands and franchises, for players everywhere to enjoy. We believe a thorough evaluation will show that the combination of Microsoft and Activision Blizzard will benefit the industry and players.”