Britain’s competition watchdog moved closer to potentially blocking Microsoft’s planned $69bn (£56bn) takeover of Call of Duty game company Activision.
The UK’s Competition and Markets Authority (CMA) said in an interim ruling that the proposed tie-up could lead to higher prices, less choice and less innovation for UK gamers.
Activision responded that regulators don’t understand the market.
big deal, First announced over a year agoDesigned to support the Xbox manufacturer microsoft position in the lucrative gaming industry.
Microsoft takes aim at Google with new AI-powered Bing
Subscriptions have become a top priority for big tech companies as traditional areas of growth, such as ad sales, have become less reliable.
But Microsoft’s strategy has been met with a series of complaints from rivals including Sony and regulators around the world.
The U.S. Federal Trade Commission (FTC) has mobile block transaction A hearing will be held in August on similar competing grounds.
The CMA launched an in-depth investigation last September after deciding that further work on its implications was necessary.
The regulator said on Wednesday it had given both parties an opportunity to address their concerns through possible remedies before reaching a final decision that could block the deal.
This will be announced by April 26, the statement said.
It explained: “The CMA tentatively found that reducing competition by restricting access to Activision games on other platforms could significantly reduce competition between the UK Xbox and (Sony) PlayStation, to the detriment of UK gamers.
“Xbox and PlayStation are competing closely with each other right now, and getting access to the most important content, like CoD, is a big part of that rivalry.
“Reducing competition between Microsoft and Sony could result in all gamers seeing higher prices, shorter range, lower quality and poorer service on consoles over time.”
Martin Coleman, chair of the CMA’s research group, added: “There are an estimated 45 million gamers in the UK, with Britons spending more on games than on any other form of entertainment, including music, film, TV and books.
“The fierce competition between Xbox and PlayStation has defined the console gaming market for the past 20 years.
“Exciting new developments in cloud gaming are giving gamers even more options.
“Our job is to ensure UK gamers are not caught in the crossfire of global deals that, over time, could harm competition and lead to higher prices, less choice or less innovation.
“We tentatively found that might be the case here.”
Read more Sky News:
UK pivots to recession but ‘a quarter of households face cost of living struggle’
McDonald’s signs legal deal to better protect UK workers from harassment
Britain’s biggest gas supplier warns output is full
Microsoft and Activision have until February 22 to submit their responses – including proposed remedies to the CMA.
It has resisted criticism from regulators, but has signed a 10-year commitment to supply the popular first-person shooter series Call of Duty to Nintendo and Sony platforms.
Activision responded: “Our hope is that between now and April, we will be able to help the CMAs better understand our industry to ensure they can achieve their stated mission of promoting a society where people can be confident they are getting good choices and a fair deal.” environment, where competition is fierce, fair-trading businesses can innovate and prosper, and the entire UK economy can grow efficiently and sustainably.”
“We are committed to providing effective and easy-to-implement solutions to address the CMA’s concerns,” said Rima Alaily, corporate vice president at Microsoft.
“We are committed to granting Sony, Nintendo, Steam, and others long-term 100% equal access to Call of Duty to preserve the benefits of the deal for gamers and developers, and to increase competition in the marketplace.
“75% of respondents to the CMA public consultation agreed the deal would be good for competition in the UK gaming industry.”