The UK’s Round and Markets Authority (CMA) announced on Wednesday that it is investigating Microsoft’s acquisition of Activision Blizzard, a video game developer and publisher of interactive entertainment content.
The CMA is considering whether the merger would “substantially reduce competition in any market or markets for goods or services in the United Kingdom,” the agency announced on July 6. To assist with evaluating the merger, CMA is inviting comments regarding the transaction. Interested third parties have set September 1 as the deadline for a Phase 1 decision, the agency said by July 20, but the date could change.
Microsoft Expectations
“We expect and think it is appropriate for regulators to take a closer look at this investment,” Lisa Tanzi, corporate vice president and general counsel at Microsoft, said in an emailed statement to The Epoch Times. “We are clear about how we plan to run our gaming business and why we believe this deal will benefit gamers, developers and the industry.”
Microsoft is “committed” to answering the regulator’s questions and believes a thorough review of the matter will help close the deal with “broad confidence,” Tanzi said. Microsoft is hoping to close its acquisition deal during fiscal year 2023. If it does, Microsoft will become the world’s third largest game publisher after Tencent and Sony.
Microsoft in January announced plans to acquire Activision Blizzard in a cash transaction of $68.7 billion. Activision Blizzard’s current CEO, Bobby Kotick, will remain in his position following the merger, Microsoft said in a January 18 news release.
issues surrounding the deal
The Microsoft-Activation deal has raised concerns among indie developers. If Microsoft’s Game Pass—the company’s video game subscription service—rapidly evolves into the only means through which people can access games, smaller game development studios may find it difficult to operate in the market. They can rely heavily on Microsoft and the Game Pass service.
If gamers sign up for Game Pass and move away from buying individual games, it will be difficult to predict what will happen to indie games, Piers Harding-Rolls, an analyst at Ampere Analysis, told the BBC.
“Certainly, indie games outside of these services may lose engagement as customers focus most of their attention on games they can access for free within the service.” He said that of the nearly 500 games available on Game Pass, not many are indie games.
Meanwhile, the US Federal Trade Commission is also investigating the merger deal, focusing on consumer data held by both companies as well as its potential impact on the childbirth market.
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