It has been over a year since Microsoft announced their plans to acquire Activision Blizzard for $68.7B, and the CMA says the merger can be harmful to competition.
Microsoft and Activision Blizzard have run into a slew of roadblocks since announcing the planned merger that would combine the Blizzard game library into Microsoft’s catalogue, and today, the UK Competitions and Markets Authority (CMA) have finished their investigation into the deal. Ultimately, the CMA has concluded that “Microsoft’s proposed acquisition of Activision could result in higher prices, fewer choices, or less innovation for UK gamers,” creating a competition problem and can potentially “harm UK gamers by weakening the important rivalry between Xbox and PlayStation gaming consoles” the CMA reports.
Yesterday, CNBC spoke to Activision Blizzard CEO Bobby Kotick regarding the potential merger, and Kotick did not mince words when detailing what he thinks of the potential block a “post-Brexit” UK can place on the merger. Kotick said “You think about post-Brexit UK, it’s probably the first country where you’re seeing a recession and the real, severe consequences of a recession,” then went on to detail how the deal can be beneficial to the UK and concluding with “Rishi Sunak has said they’d like to be the Silicon Valley of Europe or of the continent, and if deals like this can’t get through, they’re not going to be Silicon Valley, they’ll be Death Valley.”
There has also been an outpour of reactions on Twitter from fans, with @NextGenPlayer listing a potential remedy for the situation proposed by the CMA.
Despite the CNBC appearance, the CMA has released their findings since opening their investigation back in December and the findings conclude the merger between Activision Blizzard and Microsoft will harm competition. Chair of the investigation, Martin Coleman said “Our job is to make sure that UK 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,” with “We have provisionally found that this may be the case here.”
This still is not the end of the road for the merger, as Coleman also stated “We have also today sent the companies an explanation of how our concerns might be resolved, inviting their views and any alternative proposals they wish to submit.” leaving the door slightly ajar for a potential merger revisit. Fans can see the entire CMA findings on the Activision Blizzard merger on the UK government website.