By Katharine Gemmell
Microsoft Corp.’s chances of winning antitrust approval for its $69 billion takeover of Activision Blizzard Inc. got a boost after UK regulators narrowed the scope of their probe to focus solely on cloud gaming.
Microsoft Corp.’s chances of winning antitrust approval for its $69 billion takeover of Activision Blizzard Inc. got a boost after UK regulators narrowed the scope of their probe to focus solely on cloud gaming.
The Competition and Markets Authority said it changed its mind after weighing “a significant amount” of new evidence that Microsoft would be unlikely to profit from restricting access to blockbuster franchise Call of Duty on rival consoles such as Sony Corp.’s PlayStation.
Pressure has been mounting on Microsoft as it battles multiple fronts at home and in Europe to convince watchdogs to clear the deal, the company’s largest ever and one of the 30 biggest acquisitions of all time.
The CMA took an initial view that the merger could result in higher prices, fewer choices and less innovation for UK gamers. It suggested a number of remedies, including the divestiture of Activision’s Call of Duty or blocking the deal altogether. The agency did say it would consider other remedies that would safeguard rivals’ access to the blockbuster shooter game.
In its findings on Friday the CMA concluded that after reviewing more data the strategy of selling off Call of Duty “would be significantly loss-making under any plausible scenario.”
The narrowing of the probe echoes a similar step at European Union level where the bloc is said to be only focusing on cloud gaming services.
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Activision jumped about 6% to $84.58 as the market opened in New York on Friday. Microsoft was little changed.
“We appreciate the CMA’s rigorous and thorough evaluation of the evidence and welcome its updated provisional findings,” a Microsoft spokesperson said.
A spokesperson for Sony, which has been vocally opposed to the deal in the CMA probe, did not immediately respond to a request for comment.
“Sony’s campaign to protect its dominance by blocking our merger can’t overcome the facts, and Microsoft has already presented effective and enforceable remedies to address each of the CMA’s remaining concerns,” an Activision spokesperson said. “We know this deal will benefit competition, innovation, and consumers in the UK.”
