UK CMA says Microsoft Activision deal won't harm console gaming market

Britain’s competition regulator has narrowed the scope of its probe into Microsoft’s $69bn takeover of video game maker Activision, saying it no longer believes the deal would damage the UK console gaming market.

The Competition and Markets Authority (CMA) said it received “significant new evidence” relating to Microsoft’s financial incentives to make Activision’s games, including Call of Duty (CoD), exclusive to its own consoles.

However, it said it was still looking at the impact of the deal on the cloud gaming market.

Initially, the CMA warned the deal could substantially reduce the competition between its Xbox and Sony's PlayStation in the UK, as Microsoft may choose to make popular Activision games like Call of Duty exclusive to its own Xbox consoles. Microsoft has since offered Sony a licence deal to address those concerns.

It suggested that Microsoft may have to divest the arm of Activision that makes the Call of Duty franchise in order to get the deal over the line.

“While the CMA’s original analysis indicated that this strategy would be profitable under most scenarios, new data (which provides better insight into the actual purchasing behaviour of CoD gamers) indicates that this strategy would be significantly loss-making under any plausible scenario,” the CMA said in a statement.

“On this basis, the updated analysis now shows that it would not be commercially beneficial to Microsoft to make CoD exclusive to Xbox following the deal, but that Microsoft will instead still have the incentive to continue to make the game available on PlayStation.”

Reporting by Frank Prenesti for Sharecast.com