UK Challenges $69 Billion Microsoft/Activision Deal, Citing Potential Harm To Gamers (arstechnica.com) 15
An anonymous reader quotes a report from Ars Technica: The United Kingdom's Competition and Markets Authority (CMA) is challenging Microsoft and Activision Blizzard to justify their planned merger, saying the deal "could substantially lessen competition" in the gaming industry. A CMA announcement today cited concerns about "competition in gaming consoles, multi-game subscription services, and cloud gaming services (game streaming)." Microsoft announced its plan to buy Activision Blizzard for $68.7 billion in January.
"Microsoft is one of three large companies, together with Sony and Nintendo, that have led the market for gaming consoles for the past 20 years with limited entries from new rivals," the CMA said. "Activision Blizzard has some of the world's best-selling and most recognizable gaming franchises, such as Call of Duty and World of Warcraft. The CMA is concerned that if Microsoft buys Activision Blizzard it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms."
The CMA said these "concerns warrant an in-depth Phase 2 investigation," so Microsoft and Activision Blizzard have been ordered "to submit proposals to address the CMA's concerns" within five working days. "If suitable proposals are not submitted, the deal will be referred for a Phase 2 investigation," which would "allow an independent panel of experts to probe in more depth the risks identified at Phase 1," the CMA said. Besides Microsoft's Xbox console, the CMA noted Microsoft's Azure cloud computing platform and the Windows operating system. "The CMA is concerned that Microsoft could leverage Activision Blizzard's games together with Microsoft's strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services," the announcement said. "A Phase 2 investigation (PDF) can result in a merger being prohibited or a requirement to sell some parts of the business," notes Ars. "A Phase 2 investigation is typically limited to 24 weeks but can be extended by up to eight weeks."
"After a final report, 'the CMA has a statutory deadline of 12 weeks (extendable by up to six weeks for special reasons) to make an order or accept undertakings to give effect to its Phase 2 remedies.'"
"Microsoft is one of three large companies, together with Sony and Nintendo, that have led the market for gaming consoles for the past 20 years with limited entries from new rivals," the CMA said. "Activision Blizzard has some of the world's best-selling and most recognizable gaming franchises, such as Call of Duty and World of Warcraft. The CMA is concerned that if Microsoft buys Activision Blizzard it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms."
The CMA said these "concerns warrant an in-depth Phase 2 investigation," so Microsoft and Activision Blizzard have been ordered "to submit proposals to address the CMA's concerns" within five working days. "If suitable proposals are not submitted, the deal will be referred for a Phase 2 investigation," which would "allow an independent panel of experts to probe in more depth the risks identified at Phase 1," the CMA said. Besides Microsoft's Xbox console, the CMA noted Microsoft's Azure cloud computing platform and the Windows operating system. "The CMA is concerned that Microsoft could leverage Activision Blizzard's games together with Microsoft's strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services," the announcement said. "A Phase 2 investigation (PDF) can result in a merger being prohibited or a requirement to sell some parts of the business," notes Ars. "A Phase 2 investigation is typically limited to 24 weeks but can be extended by up to eight weeks."
"After a final report, 'the CMA has a statutory deadline of 12 weeks (extendable by up to six weeks for special reasons) to make an order or accept undertakings to give effect to its Phase 2 remedies.'"
"could substantially lessen competition" (Score:2)
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Dunno but I wish they would have stopped the acquisition of Zenimax/Bethesda. They had some games I enjoyed, but now I will probably not be able to play them because I'm not buying any more Microsoft equipment. The odds of them releasing those properties cross-platform seem low.
This fits into the complaint language about "restricting access or making access available on much less favorable terms."
NOTE: I don't mind when a property has "always" been on a given platform. What I mind is when a company buys a
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I wish they would have stopped the acquisition of Zenimax/Bethesda. They had some games I enjoyed, but now I will probably not be able to play them because I'm not buying any more Microsoft equipment. The odds of them releasing those properties cross-platform seem low.
Odds are good that they will do so, because 1) they hate to leave money on the table and 2) the xbox development model makes cross-platform support relatively easy. Some PC releases might be delayed to placate the console gamers who want to feel special instead of "special".
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It is larger?
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Nothing. Hence it must be prevented.
Really? (Score:2)
This is just bizarre. Yes, there are possible ways this could lead to less competition for the consumers. However, they focused on easily debunkable stuff.
What is worse? Activision actually needs this change. The current leadership is not actually projecting confidence. Their largest studios became "Call of Duty" service centers, and even though they are printing lots of money, they have lost the creative edge.
This might come strange, but: I am sure many of the Activision employees are actually looking forw
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It actually depends a lot on when and why you bought the stock, which is why there's an investigation; if it's all left up to hearsay it can seem pretty subjective.
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Since the public knows about the merger, it's not insider information that it's happening.
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It's not insider information now but it was when this all started, at which time it was announced that they were being investigated for insider trading by the SEC here in the US. Also, all you need to know I'm right is they modded me down over it.
Anything has to be better (Score:1)
Anything has to be better than the current leadership at Activision.
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Microsoft? No. They would be worse...