It adds to a chorus of doubts among major regulators and industry rivals on the deal’s impact and the creation of what some experts have referred to as the ‘Netflix of gaming’, as online streaming is becoming more popular among players.
The combination would unite the Xbox gaming platform with the maker of Call of Duty and Candy Crush and is expected to complete in June next year.
The Competition and Markets Authority said it 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.”
“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,” it added.
When the deal was announced, in January, Microsoft said it would “bring the joy and community of gaming to everyone, across every device.”
Microsoft and Activision Blizzard now have five working days to reply to the CMA’s concerns to avoid the regulator starting a detailed “Phase 2” investigation, in which an independent panel of experts will scrutinise the risks to competition.
Brad Smith, Microsoftâ¯Presidentâ¯and Vice Chairâ¯, said: “We’re ready to work with the CMA on next steps and address any of its concerns.â¯Sony, as the industry leader, says it is worried about Call of Duty, butâ¯we’veâ¯said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less.”
The deal is already facing scrutiny from the Securities and Exchange Commission in the US, as well as the Federal Trade Commission and the European Commission.