The UK’s competition regulator no longer believes that the proposed $68.7bln takeover by Microsoft Corporation (NASDAQ:MSFT) of Activision Blizzard will harm the country’s console gaming market.
In a statement, the Competition & Markets Authority (CMA) said it has reached the provisional conclusion that “overall, the transaction will not result in a substantial lessening of competition in relation to console gaming in the UK”.
The regulator had previously raised concerns that the merger could substantially reduce the competition between the Microsoft Xbox and the Nintendo PlayStation in the UK, as Microsoft could make popular games like Call of Duty (CoD) exclusive to its consoles.
However, on Thursday the CMA said its review indicated it would not be commercially beneficial to Microsoft to make CoD exclusive to Xbox following the deal.
It said new data, which provides better insight into the actual purchasing behaviour of CoD gamers, indicates that this strategy would be significantly loss-making under any plausible scenario.
“Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action,” Martin Coleman, chair of the independent panel of experts conducting the investigation, said.
He added: “Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement.”
The CMA’s investigation into the merger continues, with its final report due April 26, 2023.
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