U.K. regulator says Microsoft could need to sell Call of Duty to buy Activision

The report says the acquisition could "harm UK gamers by weakening the important rivalry between Xbox and PlayStation gaming consoles."

Call of Duty

The United Kingdom’s Competition & Markets Authority (CMA) has released a report proposing that for Microsoft to acquire Activision Blizzard, a “partial divesture” involving the Call of Duty series being separated from the transaction could be required. This would allow Activision Blizzard’s most valuable brand to be “capable of competing effectively under separate ownership,” says the CMA.

In a recent press release, the CMA says that in its current state, the $69 billion USD (about $92 billion) deal “could result in higher prices, fewer choices, or less innovation for UK gamers,” before going on to say that its report “raises concerns about cloud and console gaming” and that the acquisition would make Microsoft “even stronger in cloud gaming.”

The CMA says the acquisition would limit competition and “could also harm UK gamers by weakening the important rivalry between Xbox and PlayStation gaming consoles.”

Other findings include the fact that the Call of Duty series is important to the rivalry between Xbox and PlayStation, and, unsurprisingly, that Microsoft making Activision’s titles, including the aforementioned shooter, exclusive to its consoles would be beneficial to the company.

Microsoft recently pledged to continue releasing new Call of Duty games on PlayStation consoles for the next 10 years, and said that it will also bring the franchise to Nintendo’s Switch. In response to the CMA’s report, Microsoft’s Microsoft corporate VP and deputy general counsel Rima Alaily told Engadget the following:

“We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns. Our commitment to grant long term 100 percent equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market.”

The CMA says that its investigation took place over five months, involved business leaders at Microsoft and Xbox speaking with the organization and the examination of three million internal documents from both companies. Microsoft has until February 22nd to address the CMA’s concerns ahead of the regulator’s final report regarding the acquisition on April 26th.

Microsoft first announced plans to acquire Activision Blizzard last year and has encountered significant resistance from regulators and Sony, which say the deal is “a game-change that poses a threat to our industry.”

Activision-Blizzard is currently facing ongoing legal issues regarding harassment and workplace culture. The company has been accused of enabling “frat boy culture.” Legal proceedings and investigations remain underway. Meanwhile, CEO Bobby Kotick is also under the microscope for allegedly covering up reports and allegations. New reports continue to filter in regarding sexual harassment allegations at the company.

Image credit: Activision

Source: CMA, Engadget