The merger between Microsoft and Activision Blizzard worth $69 billion is being scrutinized by Britain’s competition watchdog. The Competition and Markets Authority (CMA) has stated that it may block the merger or require Microsoft to divest the Call of Duty franchise, which is one of the most successful video games involved in the deal. Call of Duty, with more than 400 million copies sold globally, allows players to assume the roles of soldiers in various war zones around the world.
The CMA’s concern stems from the potential for Microsoft to make Call of Duty an exclusive game for its Xbox consoles, effectively excluding Sony’s Playstation. This could lead to reduced competition, higher prices for gamers, and limited choices. The availability of exclusive games is a key driver for console sales, as players often switch between consoles to access their favorite titles.
Martin Coleman, chair of the CMA’s inquiry into the merger, emphasized the watchdog’s role in protecting UK gamers from the negative consequences of global deals that could harm competition, innovation, and affordability. He expressed concerns about the potential impact of the merger on the gaming industry.
This setback is significant for Microsoft, as Call of Duty is considered a crown jewel for Activision Blizzard. In addition to Call of Duty, Activision Blizzard owns popular titles like World of Warcraft and Candy Crush.
Executives at Activision Blizzard, including CEO Bobby Kotick, have warned that blocking the deal would hinder the UK government’s ambitions to challenge Silicon Valley’s dominance in the tech industry. They argued that such a decision would be detrimental to the growth and competitiveness of the sector.
The CMA has given Microsoft an ultimatum: either sell off Call of Duty or other significant parts of the business, or face the possibility of the merger being blocked entirely. The final decision will be made in April, after further evaluation by the regulator.
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