Britain’s competition regulator said it will refer Microsoft Corp’s $68.7 billion acquisition of “Call of Duty” maker Activision Blizzard Inc for an in-depth investigation.
The Competition and Markets Authority said the merger could reduce competition substantially in gaming consoles, multi-game subscription services and cloud gaming services.
“Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like ‘Call of Duty’ and ‘World of Warcraft’ post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming,” the CMA said.
Both Microsoft and Activision said they will continue to cooperate with the CMA.
“Sony, as the industry leader, says it is worried about ‘Call of Duty’, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft President and Vice Chair Brad Smith said in an emailed statement.
Activision still expects the deal to close in Microsoft’s financial year to June 30, 2023, Chief Executive Bobby Kotick said in a statement.
Microsoft and Activision have until Sept. 8 to respond to the CMA.
Microsoft had previously said a thorough review would boost confidence in the closure of a deal that would be positive for competition.
The company, which makes the Xbox video games console, announced the deal in January, saying gaming was the “most dynamic and exciting category in entertainment”.
The deal will add franchises such as “Overwatch”, “Candy Crush” and “World of Warcraft” to its gaming business and make it a more powerful competitor to Sony and Nintendo.
