Britain says Microsoft's 'Call of Duty' deal could harm gamers

Britain's antitrust regulator said Microsoft's $69-billion purchase of Call of Duty maker Activision Blizzard could harm gamers by weakening the rivalry between Xbox and Sony's PlayStation.

The Competition and Markets Authority (CMA) said the deal could result in higher prices, fewer choices and less innovation for millions of gamers, as well as stifling competition in the growing cloud gaming market.

It said Activision's flagship Call of Duty franchise was important in driving competition between consoles, and Microsoft could benefit by making the game exclusive to Xbox, or only available on PlayStation under materially worse conditions.

The mega deal is being scrutinized in the United States and Europe as well as in Britain, where the CMA showed its willingness to take on big tech in 2021 when it blocked Facebook owner Meta's acquisition of Giphy.

In December, the United States moved to block the deal, citing Microsoft's record of hoarding valuable gaming content. The Federal Trade Commission has set a hearing before a judge for August this year.

The CMA investigation's chair Martin Coleman said his job was to make sure that British gamers were not caught in the crossfire of global deals that could damage competition and result in higher prices, fewer choices, or less innovation.

"We have provisionally found that this may be the case here," he said.

Microsoft, which has pledged to keep Call of Duty on PlayStation, said it would address the CMA's concerns.

"Our commitment to grant long-term 100 per cent 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," Corporate Vice President and Deputy General Counsel Rima Alaily said.

The company stressed that equal meant parity on content, pricing, features, quality and playability for 10 years.

Activision Blizzard said the CMA's findings were provisional and both parties had a chance to respond before it issues a final report by April 26.

"We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals, (and) where competitive, fair-dealing business can innovate and thrive," a spokesperson said.