‘Call of Duty can’t be held hostage’, UK regulator sides with Microsoft

UK’s Competition and Markets Authority (CMA) has provisionally concluded that Microsoft’s proposed acquisition of Activision Blizzard would not lead to a substantial reduction in competition in console gaming services because Microsoft would suffer financial losses if it withheld Call of Duty from PlayStation. The regulator had previously concluded that a Microsoft strategy to withhold Call of Duty from PlayStation would be profitable, which Microsoft had criticized for its financial modeling being flawed.

The regulator now admits Microsoft would see financial losses if it withheld Call of Duty from PlayStation. The regulator’s investigation into the deal’s impact on the cloud gaming market is ongoing, which Microsoft is still subject to.

Microsoft’s deal with Activision Blizzard has been facing regulatory scrutiny in multiple countries over concerns about its impact on the gaming industry. Sony, one of the few opponents to Microsoft’s deal, had expressed concerns about the future of Call of Duty, and had also filed a case with CMA.

The CMA had to change its financial model, which had compared gains on a five-year basis to losses on just a one-year basis, after Microsoft argued that the model had “clear errors” that ultimately skewed the results.

Also read | Sony has nothing to fear on Call of duty front, Microsoft promises to play fair post-Activision deal

Microsoft has offered Sony a 10-year deal on Call of Duty, but the PlayStation maker has not yet signed the license. Sony may have been holding out for the deal to be blocked as Jim Ryan, Sony’s PlayStation chief, reportedly made it clear the company wasn’t interested in a deal with Microsoft. While the CMA’s decision has cleared one key concern over Call of Duty, the investigation into the impact of the deal on the cloud gaming market remains on course for completion by the end of April.

Also read | Boo hoo! make your own Call of Duty’, Microsoft advises Sony

Activision Blizzard has responded to the CMA’s announcement, stating that Sony’s campaign to protect its dominance by blocking their merger cannot overcome the facts, and Microsoft has already presented effective and enforceable remedies to address each of the CMA’s remaining concerns. The deal is expected to benefit competition, innovation, and consumers in the UK.