The European Union’s European Commission has launched an “in-depth investigation” into Microsoft’s proposed acquisition of Activision Blizzard, saying it has concerns that Microsoft’s bid for the company’s Call of Duty could reduce competition in video games. In response, Microsoft reminded the commission and everyone else that Sony remains the leader in gaming through PlayStation and that concerns about Call of Duty becoming exclusive to Xbox are unfounded.
“The Commission’s preliminary investigation shows that the transaction will significantly increase competition in the markets for console and PC video game distribution, including multi-game subscription services and/or cloud game streaming services, as well as for PC operating systems may affect,” the Commission said in a press release.
In particular, the commission said it was concerned that if Microsoft were allowed to buy Activision Blizzard, the company could “wall off” access to Activision Blizzard’s console and PC games, including Call of Duty. In this case, “foreclosure” refers to making something “exclusive.”
“The preliminary investigation indicates that Microsoft may have an opportunity and potential economic incentive to engage in foreclosure strategies against Microsoft’s competing console video game distributors, such as by preventing those companies from selling Activision’s console video games Blizzard on consoles or downgrading the terms of service for, or access to, those video games,” the commission said.
For multi-game subscription services and cloud game streaming services, the Commission is similarly concerned about exclusivity issues, which could raise competition concerns.
“The Commission is concerned that Microsoft’s acquisition of Activision Blizzard will limit access to its own PC and console video games, which are critical to its delivery, to the detriment of its rival console and PC video game distributors, who provide such services.” offer could exclude the emerging services of multi-game subscriptions and cloud game streaming,” the commission said.
This level of “foreclosure strategies” could reduce competition, which in turn could lead to “higher prices, lower quality and less innovation for console game retailers, which in turn could be passed on to consumers,” the commission said.
The Commission also said it was concerned that Microsoft’s proposed acquisition of Activision Blizzard could impact the PC hardware market.
“In particular, the Commission is concerned that Microsoft could limit the competitiveness of competing PC operating system vendors with Microsoft’s Windows operating system by combining Activision Blizzard’s games and Microsoft’s distribution of games via cloud game streaming to Windows. This would discourage users from buying non-Windows PCs,” the commission said.
The Commission is currently investigating these concerns and has 90 working days – ending 23 March 2023 – to make a decision.
The commission’s Margrethe Vestager said the group is trying to ensure that Microsoft’s acquisition of Activision Blizzard, if accepted, would not result in a world where Microsoft can dominate beyond reason.
“We need to ensure that opportunities remain for prospective and existing PC and console video game distributors, as well as competing PC operating system vendors. It’s about ensuring the gaming ecosystem stays alive for the benefit of users in a sector that is rapidly evolving,” Vestager said. “Our in-depth investigation will assess how the deal impacts the gaming supply chain.”
Microsoft said yes in a statement The edge that it will continue to work with the European Commission to determine “next steps” and to “address and substantiate market concerns”.
“Sony, as an industry leader, says it’s concerned about Call of Duty, but we’ve said we’re committed to making the same game available on both Xbox and PlayStation on the same day,” Microsoft said. “We want people to have more access to games, not less.”
The UK is also investigating the proposed sale of Activision Blizzard to Microsoft, along with other regulators around the world.
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