Microsoft Activision merger would 'harm gamers,' UK says
February 8, 2023
The proposed deal would be the largest in tech industry history, handing popular franchises Call of Duty, World of Warcraft and Candy Crash to Microsoft.
The result of the Competition and Markets Authority's (CMA) investigation constitutes a further hurdle for the gaming industry giant following similar concerns in the US.
The CMA said that the deal — that would see Xbox-brand owner Microsoft take over one of the games industry's biggest publishers — would strengthen Microsoft's industry position, "harming UK gamers who cannot afford expensive consoles."
Rivals and regulators raise the alarm
The proposed $68.7 billion (€64.03 billion) deal is set to be the largest in tech industry history.
It would see popular franchises Call of Duty, World of Warcraft and Candy Crash all fall into Microsoft's hands.
It has seen pushback from console rival Sony — whose PlayStation machines are the main alternative to the Xbox — as well as EU and US regulators.
From Atari to Xbox Series X: The evolution of video game consoles
Massive or playful, original, and sometimes elegant: Every new video game console generation has a fresh design. Sometimes they reflect the zeitgeist, others are revolutionary.
Image: Microsoft
Xbox Series X (2020)
Microsoft remained true to the established console design tradition for its Xbox Series X. Many social media critics felt it looked uninspired, and the console was ridiculed for resembling a computer tower or even a mini-fridge, which is why it earned the nickname "Xbox Fridge."
Image: Microsoft
PlayStation 5 (2020)
With its playful curves, the PS5 looks futuristic. It also breaks with the PlayStation tradition, as it is for the first time in two colors. The reactions on social media are divided: For some, the design is a revelation, for others, the look is reminiscent of a wireless router. The following pictures in this gallery take a look back at how games consoles have developed since the late 1970s
Image: Reuters/Sony Interactive Entertainment Inc.
Atari Video Computer System (1977)
The Atari VCS, also known as Atari 2600, was the first console bestseller. With games like Q*bert, Pacman and Space Invaders, the console delighted millions of gamers worldwide. The design was based on the wood veneer look popular with the era's TV sets.
Image: picture-allince/Zuma Wire/D. Klamka
Nintendo Entertainment System (1983)
The Nintendo Entertainment System (NES) was launched in Japan as a family computer under the name Famicom. The unremarkable grey box still has fans to this day. Manufacturer Nintendo laid the foundation for famous game series like Super Mario Bros. and Zelda. The controller was the first to introduce the control pad, which became standard for all manufacturers.
Image: picture alliance/R. Goldmann
Super Nintendo Entertainment System (1990)
In 1990, the Super Nintendo Entertainment System (SNES) was released in Japan under the name Super Famicom, followed by the US in 1991 and Europe a year later. With its rounded corners and large buttons, the drab grey console was a robust toy for children that easily survived a tumble from a shelf without damage.
Image: picture-alliance/dpa/C. Seidel
Playstation (1994)
Sony's success story on the console market began with the Playstation. The sleek device was inspired by the SNES. Originally, Sony was supposed to develop a CD drive for the SNES, but Nintendo decided to go with another company. Sony built its own console and became a major competitor.
Image: picture-allince/Zuma Wire/D. Klamka
Nintendo GameCube (2001)
The name says it all. The standard edition was a purple cube, the shape a reference to an object that is an inherent part of many games, the dice. The color purple was intentional, as Nintendo mainly produced video games suitable for children, selling them exclusively for Nintendo consoles.
Image: picture-alliance/dpa/AFP/Y. Tsuno
Xbox (2002)
The Xbox was the first console created by Microsoft. The company was keen to establish the Xbox brand as quickly as possible, which might explain the decision to cover the console with a large letter "X." Size mattered: The Xbox was slightly bigger and blockier than other consoles.
Image: picture-alliance/dpa/J. Gurzinski
Xbox 360 (2005)
The Xbox 360 is an example of poor design. It is not necessarily ugly, but the ventilation didn't work well. When the console overheated, the LEDs surrounding the power button turned red. Often enough, that meant the console needed to be taken to a repairshop. The infamous "Ring of Death" went down in gaming history.
Image: Imago/Zuma/M. Day Mass
Wii (2006)
Nintendo's Wii was a slim, white console with a slant. At the time, the color white was the hottest color for cool, technical devices. The iPod, which had been around for several years, was also white. Controllers with motion sensors and a wrist strap were innovative features that gave people a new gaming experience.
Image: picture alliance/ImageBROKER/NielsDK
Playstation 4 (2013)
The Playstation 4 came along with a simple-looking, reserved design, but it wasn't without appeal. The glossy piano varnish surface gave it an elegant touch. Buttons, connections and drive were cleverly concealed. This console was no longer a child's toy.
Image: picture-allince/dpa/A. Warnecke
Nintendo Switch (2017)
While Sony and Microsoft continued to develop their tried and tested models, Nintendo turned to something new: enter the Switch. The device was a hybrid, half handheld, half stationary console — basically a display with connected controllers.
Image: picture alliance/dpa/C. Gateau
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The CMA said the merger could end up "weakening the important rivalry" between Xbox and PlayStation, thus reducing competition and resulting in higher prices, less innovation and fewer choices.
"We have provisionally found that this may be the case here," CMA investigation chair Martin Coleman said.
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What's next for the Microsoft Activision deal?
The final CMA report is expected in late April, giving time for the watchdog to seek possible solutions from all parties to address its competition concerns.
But Microsoft had been hoping for a speedy resolution in the UK and EU so that it could bring back proposed remedies to the US Federal Trade Commission (FTC), which filed a lawsuit against the deal in December.
The company is also facing other regulatory issues with the European Union as the bloc seeks to take on Big Tech, worrying that the industry has become too dominant.
Regarding the Activision buyout, Microsoft has pledged to keep the Call of Duty franchise available on all platforms, addressing one of the CMA concerns.
"Our commitment to grant long-term 100% 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.
"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 for Activision Blizzard said.