UK Says Microsoft, Activision Blizzard Deal Won't Hurt Console Market

After months of reviews, interviews, and skepticism from the UK's markets watchdog, the CMA has just issued a press release stating that it now believes the Microsoft-Activision merger "will not result in a substantial lessening of comPetition in relation to console gaming in the UK." That's a significant turnabout from just a few months ago when the CMA said the very same merger "could harm Gamers."

The CMA stated that new evidence has "provisionally" alleviated concerns related to the UK's console market. Chief among that evidence is new analysis that indicates that Microsoft has little to gain from making Call of Duty exclusive to PC and Xbox consoles, writing, "this strategy would be significantly loss-making under any plausible scenario."

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The CMA added: "The updated analysis now shows that it would not be commercially beneficial to Microsoft to make CoD exclusive to Xbox following the deal, but that Microsoft will instead still have the incentive to continue to make the Game available on PlayStation."

However, the CMA noted that this provisional finding only relates to the console market. The CMA's initial concerns that the Microsoft-Activision merger could "stifle" comPetition in the cloud gaming market have yet to be addressed, although the watchdog said it "is continuing to carefully consider the responses provided in relation to the original provisional findings."

Although it's not stated explicitly, Microsoft's strategy of signing ten-year contracts to ensure Call of Duty remains on rival platforms likely had something to do with the CMA's provisional statements. Microsoft has been saying all along that it had no intentions of restricting Call of Duty sales as it didn't make any financial sense, and signing contracts to that effect might have been the proof the CMA needed.

Sony, meanwhile, has refused to sign a similar ten-year contract with Microsoft, contending that ten years is both not long enough and that Microsoft would simply break its own contract. Microsoft seems to have tired of Sony's constant complaining and has since told its rival to simply make its own Call of Duty if it's so worried about losing access following the merger.

The CMA is due to issue its final decision on the Microsoft-Activision merger on April 26.

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