Microsoft’s proposed $70 billion acquisition of Activision Blizzard is facing intensified regulatory scrutiny worldwide after the United Kingdom’s Competition and Markets Authority (CMA) signaled on Thursday, February 1, that the deal could move to a Phase 2 investigation for a deeper review of potential antitrust issues.
The purchase, announced in January, has attracted attention because of its possible impact on the video game industry, particularly given Microsoft’s Xbox Game Pass subscription service and cloud gaming offerings. Regulators are evaluating whether the merger could reduce competition across gaming platforms.
A central concern highlighted by the CMA is the prospect that flagship titles such as Call of Duty could become exclusive to Microsoft platforms. The regulator said a detailed investigation would be warranted if the deal raised the likelihood of diminished competition—something regulators and rival companies, notably Sony, have repeatedly flagged as a risk.
Call of Duty exclusivity at the center
Call of Duty’s popularity has made it a focal point in the review. Sony has argued the franchise could enable Microsoft to gain a dominant position in the market if it became exclusive to Xbox. Microsoft, however, has stated that Call of Duty will continue to be available on other platforms.
Brad Smith, Microsoft’s president and vice chair, reiterated the company’s commitment to platform parity, saying the firm is prepared to work with the CMA to address concerns. He emphasized Microsoft’s position that the title will be launched on the same day for both Xbox and PlayStation, and framed the company’s intent as expanding access to games rather than restricting it.
Global regulatory landscape
So far, only Saudi Arabia has publicly approved the acquisition. In the United States, the Federal Trade Commission (FTC) has escalated its review to a second-phase investigation. Several jurisdictions are conducting more thorough examinations of major global transactions, a trend underscored by former FTC chair William Kovacic, who told Fox40 that an increasing number of significant economies are applying rigorous scrutiny to such deals.
Microsoft’s broader response to concerns
Beyond antitrust questions, Microsoft is also addressing reputational and cultural issues tied to Activision Blizzard. The studio has faced multiple federal civil-rights lawsuits alleging workplace discrimination. Microsoft has taken steps to reshape Activision Blizzard’s corporate culture and has discussed organizing a union structure for company employees as part of its integration efforts.
Timeline and industry effects
Microsoft expects the regulatory process to continue into 2023 before the acquisition can be completed. Meanwhile, the deal’s uncertainty has coincided with continued consolidation in the games industry, such as Sony’s recent purchases of Bungie and Savage Game Studios.
Information via Fox40
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