ATVI Activision Blizzard Inc

By Kyle Morris

The U.K.'s Competition and Markets Authority said Wednesday that its Phase 2 investigation has provisionally found that Microsoft Corp.'s proposed $75 billion acquisition of Activision Blizzard Inc. could lead to higher prices, fewer choices, or less innovation for U.K. gamers.

The regulator said that its in-depth independent investigation provisionally found the deal raises concerns on cloud and console gaming. Any merger could make Microsoft even stronger, stifling competition and harming U.K. gamers.

For cloud gaming, evidence indicates that Microsoft would find it commercially beneficial to make Activision's games exclusive to its cloud service and reinforce its position and substantially reduce competition, the regulator said.

For consoles, the regulator found that a small number of key games, including "Call of Duty," Activision's flagship game, play an important role in driving competition between consoles, the CMA said. The evidence indicates Microsoft may also benefit from making the content exclusive, a strategy that has been used by Microsoft previously.

The deal could then weaken the rivalry between Xbox and PlayStation gaming consoles, it said.

"Strong competition between Xbox and PlayStation has defined the console gaming market over the last 20 years," Martin Coleman, chair of the panel conducting the investigation, said. "Our job is to make sure that U.K. gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation. We have provisionally found that this may be the case here."

"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 U.K. economy can grow productively and sustainably," Activision Blizzard said.

Microsoft said Wednesday that it is committed to offering effective and easily enforceable solutions that address the CMA's concerns.

Microsoft announced the deal to buy Activision for approximately $95 a share in January. It has said it expects the deal, which would be its largest acquisition by far, to close by June of 2023.

The regulator is inviting responses from interested parties to its provisional findings by March 1.

Write to Kyle Morris at kyle.morris@dowjones.com

-0- 

(END) Dow Jones Newswires

February 08, 2023 07:51 ET (12:51 GMT)

Activision Blizzard (NASDAQ:ATVI)
Historical Stock Chart
From Aug 2023 to Sep 2023

Activision Blizzard (NASDAQ:ATVI)
Historical Stock Chart
From Sep 2022 to Sep 2023