UK watchdog raises concerns over Microsoft buyout of Activision Blizzard

theguardian.com:

The UK’s competition regulator has raised concerns about Microsoft’s $68.7bn deal to buy the Call of Duty publisher, Activision Blizzard, and given the two companies five days to offer solutions.

The Competition and Markets Authority (CMA) warned that the Xbox owner’s proposed takeover of the company behind popular titles including World of Warcraft and Candy Crush, which would be the biggest ever gaming industry merger, “could substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services”.

The CMA added: “Microsoft already has a leading gaming console (Xbox), a leading cloud platform (Azure), and the leading PC operating system (Windows OS), all of which could be important to its success in cloud gaming.”

The two companies now have five working days to submit proposals to address its concerns, and if suitable suggestions are not submitted, the deal will be referred for a phase 2 investigation, allowing an independent panel of experts to examine the risks in greater detail.

“We are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming,” said Sorcha O’Carroll, the CMA’s senior director of mergers.

In response, Phil Spencer, Microsoft’s head of gaming, promised that the company would pursue a “principled path”.

Spencer said: “As we’ve said before, we are committed to making the same version of Call of Duty available on PlayStation on the same day the game launches elsewhere.

“We will continue to enable people to play with each other across platforms and across devices. We know players benefit from this approach