The UK’s Competition and Markets Authority (CMA) has recommended an “in-depth investigation” into Xbox’s intended acquisition of Activsion-Blizzard. Xbox has responded, saying it will work to address the watchdog’s concerns.
After announcing a Phase 1 investigation in July, the CMA has released its initial results, citing several concerns about the effects of the deal. The CMA says, “it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms.” It added that “Microsoft could leverage Activision Blizzard’s games together with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services.”
It has now recommended a Phase 2 investigation, which would see an independent panel of experts providing a more intensive probe into those concerns. Microsoft and Activision-Blizzard now have 5 days to submit responses to prevent a Phase 2 investigation.
Microsoft president Brad Smith has responded directly to the announcement. In a statement provided to IGN, Smith said, “We’re ready to work with the CMA on next steps and address any of its concerns. 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. We want people to have more access to games, not less.”
At the same time, head of Microsoft Gaming Phil Spencer has written a blog about the company’s thoughts on the acquisition, making clear that games like Call of Duty will be added to the Xbox Game Pass service, but will be released on PlayStation simultaneously.
“We will continue to engage with regulators with a spirit of transparency and openness as they review this acquisition,” Spencer wrote. “We respect and welcome the hard questions that are being asked. The gaming industry today is robust and dynamic. Industry leaders, including Tencent and Sony, continue to expand their deep and extensive libraries of games as well as other entertainment brands and franchises, which are enjoyed by players everywhere. We believe that a thorough review will show that the combination of Microsoft and Activision Blizzard will benefit the industry and players.”
The near $70 billion deal is by far the biggest gaming buyout of its kind, and is being scrutinized by regulators across the world. Stockholders have approved the deal, and Phil Spencer has publicly said he “feels good” about the deal.
Joe Skrebels is IGN’s Executive Editor of News. Follow him on Twitter. Have a tip for us? Want to discuss a possible story? Please send an email to newstips@ign.com.