The UK Competition and Markets Authority (CMA) provisionally opposed a proposed $68.7 billion acquisition of Activision Bizzard by Microsoft, ruling the tie-up could make the technology giant even stronger in cloud gaming and stifle competition for consumers.
In a statement outlining the findings of a wide-ranging investigation conducted over the last five months, the CMA noted it had evidence indicating Microsoft would find it commercially beneficial to make Activision Blizzard’s games exclusive to its cloud gaming service, or only on other services under materially worse conditions.
The CMA stated Microsoft already held an estimated 60 per cent to 70 per cent share of the global cloud gaming market and had strength in related assets including Windows OS, Azure and Xbox.
However, the CMA hinted Microsoft could go some way to easing competition concerns by agreeing to sell Activision Blizzard’s Call of Duty franchise after any takeover.
The title has generated sales of $30 billion for the games company.
The CMA argued Activision Blizzard is one of the world’s most-important gaming publishers, meaning an acquisition would enable Microsoft to reinforce its strong position in the market.
“This could alter the future of gaming potentially harming UK gamers, particularly those who cannot afford or do not want to buy an expensive gaming console or gaming PC,” added CMA.
It also cited concern over the impact the deal could have in the console gaming market.
The regulator will release its final report on the deal in April.
In December 2022, the US Federal Trade Commission sued to block the tie-up, while the deal is also facing a probe from the European Commission.