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Microsoft’s controversial purchase of Call of Duty developer Activision likely won’t hurt the console market, regulators said in a major announcement about their ongoing investigation.
The deal would be one of the biggest in history, and would see games like Call of Duty fall under the Xbox umbrella but it proved controversial, with critics including PlayStation arguing it would undermine the console market.
Initially, the UK’s Competition and Markets Authority said the deal raised concerns about both console and cloud gaming in the UK. His first report indicated that it would have to be changed if the deal went ahead.
Now the CMA says it has seen more information about the deal and no longer believes there are concerns about console games. This means that one of the major objections to the contract has been cleared, and the purchase appears less likely to be challenged or altered.
The CMA’s decision came after receiving data indicating that making Call of Duty available exclusively on Microsoft’s Xbox console would not be profitable. It said it had received new data showing that doing so would be “significantly disadvantageous”.
Perhaps the most significant of PlayStation’s objections is the contract’s impact on the gaming market. It said it would be difficult or impossible for its consoles to compete if Xbox was the only way to play the game, which is the most popular in the world.
In an effort to address these objections, Microsoft has made various commitments, including signing contracts with platforms like Nintendo that promise to make the game available for at least 10 years. It offered to do the same with PlayStation, but Sony argued that such a deal would be difficult to pull off.
The CMA said its new analysis found that “it would not be commercially beneficial for Microsoft to make CoD exclusive to Xbox after the deal, but that Microsoft would have an incentive to continue making the game available on PlayStation instead.”
Regulators are just changing their view of the impact of the takeover on console games. In the initial report, the CMA also raised concerns about what it could do for cloud gaming — and those concerns have not changed, it said.
The final report of the investigation is expected by April 26. Other regulators – including the US and Europe – are investigating the deal and must approve it before it can move forward.
said Martin Coleman, chairman of the independent panel of experts conducting the investigation.
“Having considered the additional evidence presented, we now tentatively conclude that the merger will not significantly reduce competition in console game services because the costs to Microsoft in divesting Call of Duty from PlayStation would outweigh any gains from taking such action.
“Our initial view that this transaction raises concerns in the cloud gaming market has not been affected by today’s announcement. Our investigation is on track to be completed by the end of April.”
