UK Regulator Proposes Call of Duty to be Removed from Microsoft’s Activision Deal
In the neverending sage between Microsoft and U.K. regulators, the UK’s Competition and Markets Authority (CMA) has published its provisional conclusion and suggests Microsoft remove Call of Duty from its proposed $68.7 billion USD (roughly $94 billion CAD) acquisition of Activision Blizzard.
The U.K. regulators believe that Microsoft’s successful acquisition could “result in higher prices, fewer choices, or less innovation for UK gamers”. The CMA also believes that major franchises like Call of Duty, Overwatch, etc. could influence the growth of cloud-based streaming. Of course, Microsoft has a direct hand in this technology with Xbox Cloud Gaming. The CMA worries that Microsoft could make these games exclusive within its cloud offering.
According to VGC, the CMA suggests that Microsoft considers a “partial divestiture of Activision Blizzard” in order to appease regulators. This could potentially take the form of selling off part of the business exclusive to the Call of Duty franchise. Alternatively, this partial divestiture could result in the sale of the “Activision” and/or “Blizzard” portions of the company. However, the CMA appears to be transparent in saying there’s still the possibility the solution may be to prohibit the merger altogether.
Naturally, this spins yet another hiccup for Microsoft and its plans to fold Activision Blizzard under the Xbox Game Studios umbrella. For over a year, the Xbox parent company has been working with global regulators to gain approval. However, two major roadblocks continue to stand in the company’s way — the CMA and the FTC.
In order to hopefully sway the opinions of regulators, Microsoft has offered and secured 10-year-long deals with Nintendo and Valve, promising Call of Duty will remain on the respective platforms. The same offer has been extended to Sony. However, the latter has not yet been accepted. The CMA recognizes this deal. However, to report states that while it is being considered an option, the regulators would prefer to see Call of Duty removed from the equation entirely.
The CMA is remaining open to hearing “any other practicable remedies” from Microsoft or third parties. Until February 22nd, the CMA will elicit new propositions. Responses to its provisional findings can then be filed by March 1. The regulator’s final report is due by April 26th.