The British competition authority (CMA) in turn expressed fears on Wednesday regarding the potentially negative impact for consumers of the proposed takeover of the American video game publisher Activision Blizzard by its compatriot Microsoft.
In addition to the United Kingdom, the United States and the European Union (EU) are concerned regarding this mega-merger: the American competition authority (FTC) launched legal proceedings in December to block the operation and the EU has launched an investigation into whether the acquisition would make Activision’s games exclusive to Xbox, a console marketed by Microsoft.
The British regulator might later decide on corrective measures such as partial disposals of assets, or even opt for an outright ban on the operation.
The “CMA concludes on a preliminary basis that Microsoft’s proposed acquisition of Activision might result in higher prices, less choice and innovation for UK gamers,” it said in a statement.
In mid-September, it launched an in-depth investigation into this $69 billion operation, a record sum for the sector, made public in early 2022.
In its statement Wednesday, the CMA said preliminary findings from its investigation show that buying one of the world’s largest game publishers would “strengthen Microsoft’s strong position” and “significantly reduce competition” compared to the one that the American giant would otherwise face in the market for dematerialized games in the United Kingdom.
– Altering the future of the sector –
“This might alter the future of the games industry, and potentially hurt UK gamers, especially those who don’t want to buy an expensive games console or computer,” the CMA adds.
Microsoft’s acquisition of Activision Blizzard, which notably publishes the hits “Call of Duty”, “World of Warcraft” and “Candy Crush”, would create the third largest player in the video game industry in terms of turnover , behind Chinese Tencent and Japanese Sony, maker of the PlayStation.
In December, following the launch of the lawsuits in the United States, a senior Microsoft official said he was confident in his company’s ability to carry out the operation despite the ongoing procedures.
Activision Blizzard responded to the CMA’s announcement on Wednesday, noting that its findings are preliminary and give “both parties an opportunity to respond,” in a statement obtained by AFP.
“We hope that between now and April we will be able to help the CMA better understand our sector,” adds the company.
Activision chief executive Bobby Kotick said in a message to group employees on Wednesday that “the law and the facts” are on the company’s side. He assures that the two combined entities will generate more competition in a sector which already includes many players, such as “Sony, Tencent, NetEase, Apple, Amazon”, he lists.
“We are very confident in our case,” Brad Smith, president of Microsoft, told AFP in December.
In particular, he highlighted a proposal from Microsoft made at the beginning of December to its Japanese rival Sony, in a column published by the Wall Street Journal, namely a 10-year agreement providing that any new opus of “Call of Duty” be released simultaneously on Xbox and PlayStation, Sony’s console.
Even though the CMA has yet to announce any corrective action, Hargreaves Lansdown analyst Susannah Streeter says it is “derailing Microsoft’s takeover of Activision Blizzard.”
She observes that Activision’s share price, very “lower than Microsoft’s offer, illustrates the strong skepticism of shareholders” regarding the chances of success of the operation.
The title of Activision Blizzard fell 1.79% to 74.25 dollars around 4:00 p.m. GMT on the Nasdaq, and that of Microsoft gained 1.17% to 270.72 dollars.