Xbox vs PlayStation: CMA’s Activision Decision Favors Microsoft over Sony

The battle over the largest tech acquisition in the history of the United States shows no signs of slowing down. A year has passed since the announcement of Microsoft’s $69 billion acquisition of Activision Blizzard, and the deal has since been scrutinized by regulators. Despite this extensive review process, the conclusion of this transaction remains uncertain. The recent verdict from UK’s Competition and Markets Authority (CMA), which has taken a stance in this matter, is just the latest development in this prolonged saga.

Recent reports have confirmed that the UK’s Competition and Markets Authority has sided with Microsoft regarding concerns that Call of Duty could be removed from PlayStation if the proposed acquisition of Activision Blizzard is approved. Nevertheless, the regulator’s ongoing investigation continues to focus on the potential impact of the deal on the cloud gaming market, with the final results expected to be announced by the end of April.

“Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action,”

Martin Coleman, the chair of the independent panel of experts leading the CMA’s investigation

The CMA had initially expressed its concerns regarding the potential impact of Microsoft’s acquisition of Activision Blizzard on the console gaming services industry. However, following its thorough investigation and examination of supplementary evidence, the regulatory body has tentatively concluded that the deal wouldn’t lead to a considerable decrease in market competition within the console games market. Therefore, this latest verdict from the CMA implies that it no longer opposes the acquisition and that Microsoft’s $69 billion deal with Activision Blizzard could be nearing completion.

With the CMA’s recent ruling in favor of Microsoft, the possibility of Microsoft and Sony reaching a licensing deal for Call of Duty on PlayStation has become more likely. Microsoft has reportedly presented Sony with a proposal for a 10-year agreement regarding Call of Duty, but Sony has yet to sign the license. If the Microsoft-Activision Blizzard deal is eventually approved, Sony may be more likely to sign the licensing agreement to ensure that the popular Call of Duty game remains available on PlayStation consoles.

The CMA’s reduced scrutiny over the acquisition’s impact on the console games market has resulted in an optimistic outlook for the deal. As a result, Activision Blizzard’s shares experienced a notable surge on Friday following an update from the CMA about the Microsoft takeover of the gaming company.