The Competition and Markets Authority (CMA) made the decision after the Seattle-based X-box maker failed to offer reassurances to address competition concerns.
Earlier in September, the CMA said it feared the deal would damage the video games market by blocking access to Activision’s games or giving access on unfavourable terms. The deal is awaiting regulatory clearance in the US, UK and EU.
The CMA’s senior director of mergers, Sorcha O’Carroll, said: “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.”
The maker of Xbox rivals PlayStation has also sounded the alarm on the merger’s potential to hurt competition in the games industry. Jim Ryan, the boss of PlayStation owner Sony Interactive Entertainment said: I feel the need to set the record straight…Microsoft has only offered for Call of Duty to remain on PlayStation for three years after the current agreement between Activision and Sony ends.”
Microsoft vice president Brad Smith has hit back at those concerns, telling the Reuters news agency: “We want people to have more access to games, not less,” adding he was committed to making Activision’s latest Call of Duty release “available on the same day on both Xbox and PlayStation.”
The deal, which was first announced in January, is set to close in June 2023 if it clears regulatory hurdles. Microsoft is understood to face a $3 billion break-up fee if the deal falls through.
Activision Blizzard’s Call of Duty game is the best-selling first person shooter game series ever made, with over 400 million copies sold since it was first released in 2003.