UK to Microsoft and Activision: Sell Call of Duty or we’ll block the billion-dollar takeover

The transaction is worth USD 70 billion and if it came to fruition, the Redmond giant would become the third largest gaming entity in the world.

However, Microsoft and Activison’s merger plans may still backfire. The big transaction has been watched by market regulators for several months – in both Europe and the United States.

In December last year, the US Federal Trade Commission filed a lawsuit to block the transaction until Microsoft clarifies any doubts.

Today, we’re trying to stop Microsoft from gaining control of a leading independent game studio and using it to hurt competition in the many dynamic and fast-growing markets of the gaming industry

– explained Holly Vedova, director of the FTC’s Office of Competition.

The European Union is also to be skeptical about the proposed merger. According to the findings of Politico, Brussels was to send a document to Microsoft explaining why the merger with Activision Blizzard could be disadvantageous to the gaming industry and the customers themselves.

We are listening carefully to the concerns of the European Commission and we are confident that we can address them

–

CMA to Microsoft: Merger means higher prices and less choice

Now the British antitrust regulator has also joined the game. On Wednesday CMA (Competition and Markets Authority) released the preliminary results of its investigation into the acquisition of Activision Blizzard by Microsoft.

In the document, officials emphasize that the merger may translate to higher prices, less choice and a decline in innovation in the UK. However, the CMA did not stop there. The Office also put forward several proposals that could potentially resolve the impasse.

One of the ideas would be to sell the Activision segment responsible for the Call of Duty series. Another – going even further – total sales of the Activision segment and/or the Blizzard segment.

For now, however, it is not known whether Microsoft is ready for such far-reaching concessions. Rima Alaily, Microsoft’s deputy general counsel for the Financial Times, said only that the company was “committed to offering effective and enforceable solutions that address the concerns of the CMA.”

Sony fears that Microsoft will “take” Call of Duty

One of the biggest opponents of the merger of Microsoft and Activision is Sony. The company claims that Microsoft would gain too much market power. This is interesting because even if the companies merge, they will still be “only” the third force on the gaming market – after Tencent and behind … Sony.

Activison Blizzard owns one of the most profitable gaming brands – Call of Duty. According to Sony, after the merger, Microsoft will try to take over PlayStation users who will have to move to Xbox to continue playing Activision’s production.

However, Microsoft has denied that this is their goal.

The first thing I did after the deal was announced was I called Sony’s CEO and said, “Hey, we’re going to keep Call of Duty on your console.”

– said Phil Spencer, head of the Xbox division at Microsoft.

According to Microsoft, Sony is misleading regulators by “overestimating the importance of Call of Duty to their profitability”. Phil Spencer also added that “maintaining Call of Duty’s current business model (releasing it on computers and consoles from various companies – ed.) is crucial to the transaction.”

Jim Ryan, executive director at Sony Interactive Entertainment, said it is not true that they misled regulators. He added that Microsoft “as a tech giant has a long history of industry dominance” and “probably the choice that gamers have today will disappear once the merger goes through.”