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The British competition authority, the Competition and Markets Authority (CMA), put the brakes on Microsoft’s acquisition of Activision Blizzard on the 8th (herefollowing local time).
The reason was that competition in the UK might be reduced.
The acquisition of Activision, famous for its ‘Call of Duty’ game, seemed to gain momentum once more as Microsoft won the Federal Trade Commission (FTC) in the US court, but met a rock once more with opposition from the British competition authorities.
Microsoft’s $75 billion M&A (approximately 94.5 trillion won) is still unable to get out of the tunnel.
narrower selection and higher prices
According to foreign media outlets such as the Financial Times (FT) and CNBC, CMA was concerned that if Microsoft merged with Activision on this day, gamers would face “higher prices, fewer choices, or slower innovation.”
In addition, it was judged that it might weaken “an important competitive relationship in the game console market between (MS) Xbox and (Sony) PlayStation.”
In addition, the cloud game market, which is adjacent to the video game market, may also weaken competition, CMA said.
The decision on this day is a preliminary decision, and MS must present a solution that can overturn the CMA’s preliminary decision before the final decision in April.
CMA nailed down that the clear way to solve the problem of reduced competition is to prevent the two companies from merging.
However, as one option, Microsoft suggested selling ‘Call of Duty’. This game is expected to bring Activision $30 billion in sales, and is actually the key background for Microsoft’s acquisition of Activision.
Call of Duty Exclusive
CMA said its own analysis showed that Microsoft had sufficient commercial incentives to exclusively supply Call of Duty, the best-selling game, to the Xbox once the acquisition of Activision was finalized.
CMA pointed out that even if Microsoft supplies Call of Duty to other companies, it is highly likely that it will supply Call of Duty to itself under much more favorable conditions than before, and that in this case, competing game console companies such as Sony will be at a disadvantage.
CMA also took issue with Microsoft’s power.
Microsoft criticized that following buying game companies in the past, it has used the games they make exclusively for its own platform.
According to the source, Microsoft is considering ways to overcome CMA’s refusal by promising to make a contract to supply Call of Duty to Sony for 10 years, just as it did with Nintendo last December.
Microsoft’s deputy general counsel, attorney Lima Alliley, said there was still a glimmer of hope that a licensing scheme like the one it had with Nintendo would allay CMA’s objections.
If Call of Duty is offered to Sony, Nintendo, Steam, and other vendors with a promise of 100% access over the long term, Aliley expects CMA to accept it as well.
dympna@fnnews.com Reporter Song Kyung-jae