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CMA: Microsoft’s Activision buyout “will not result” in lessening of competition

The CMA has published its latest update into its ongoing investigation into Microsoft's proposed acquisition of Activision Blizzard. While previously, the regulator seemed to have many concerns, it has now “narrowed its scope” of issues with the deal and no longer feels that it would “result in a substantial lessening of competition in relation to console gaming in the UK”.

Microsoft has been adamant that it has no plans to remove Call of Duty from other platforms and instead wants to bring the franchise to more platforms and devices. This led to a round of 10-year licensing deals with rival companies, like Nintendo, Valve (Steam), Nvidia and others, promising to bring Call of Duty to rival consoles and cloud gaming services. In light of this, the CMA is no longer concerned about Microsoft taking Call of Duty away from PlayStation.

“The CMA has received a significant amount of new evidence in response to its original provisional findings. Having considered this new evidence carefully, together with the wide range of information gathered before those provisional findings were issued, the CMA inquiry group has updated its provisional findings and reached the provisional conclusion that, overall, the transaction will not result in a substantial lessening of competition in relation to console gaming in the UK”, the regulator writes in its latest public report.

The CMA specifically points to Microsoft's financial arguments as a key reason for this change in decision. Microsoft argued that it would not make financial sense to take Call of Duty away from PlayStation and even pointed out a number of flaws in the CMA's assessment of the console market.

While the CMA is convinced that the acquisition won't reduce competition in the console gaming space, it does still have concerns about the future of cloud gaming, which is still an emerging market.

“Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement”, the CMA writes.

Microsoft has tried to combat this with 10-year deals with Nvidia's GeForce Now and other services, like Ubitus, a cloud gaming provider that brings Triple-A games to Nintendo Switch through streaming.

The CMA will make its final decision on the deal by the end of April, as will the European Commission.

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KitGuru Says: Given that the CMA has been viewed as the most problematic of the regulators up to this point, today's update does seem like a positive sign that the deal will go through. There are still some concerns around the cloud market, but things are clearly moving in Microsoft's favour at this point. 

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