Entertainment

Microsoft's Activision Blizzard acquisition faces a new hurdle in the UK

The CMA says it is "concerned" that the acquisition could "substantially lessen competition" in gaming consoles, subscription services and cloud gaming.

A screenshot of various Activision Blizzard games.

The U.K.'s Competition and Markets Authority is pressing Microsoft on the Activision deal, all but ensuring a more in-depth regulatory review will be required.

Image: Microsoft

Microsoft is now contending with increased pressure from U.K. regulators over its proposed acquisition of game publisher Activision Blizzard. On Thursday, the U.K.'s Competition and Markets Authority said it had "concerns" over the deal and would proceed with a second and extended period of regulatory review if Microsoft did not address the issues within five business days.

The tight time window all but ensures the so-called Phase 2 review will likely commence, which may involve deeper negotiations with the CMA over a period of many months that could prevent the deal from closing until well into 2023. Microsoft originally set a final deadline of June 2023 for the deal to pass, and the company is still working with both the U.S. Federal Trade Commission and the European Union's European Commission, the other two major regulatory bodies that could reasonably hold up or even doom the deal entirely.

"The Competition and Markets Authority (CMA) is concerned that Microsoft’s anticipated purchase of Activision Blizzard could substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services (game streaming)," the CMA wrote in a statement. The agency went on to say that it's concerned that if "Microsoft buys Activision Blizzard it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms."

Sorcha O’Carroll, the CMA's senior director of mergers, said in a statement, "We are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming."

Microsoft has already released a blog post in response that outlines its position on the deal and tries to assuage concerns around Call of Duty and other thorny parts of the proposed acquisition. The post, penned by Microsoft Gaming CEO and Xbox chief Phil Spencer, echoes familiar statements company executives have made over the past nine months, including a commitment to keep Activision's Call of Duty franchise available to PlayStation players.

"We’ve heard that this deal might take franchises like Call of Duty away from the places where people currently play them. That’s why, as we’ve said before, we are committed to making the same version of Call of Duty available on PlayStation on the same day the game launches elsewhere," Spencer said. "We will continue to enable people to play with each other across platforms and across devices. We know players benefit from this approach because we’ve done it with Minecraft, which continues to be available on multiple platforms and has expanded to even more since Mojang joined Microsoft in 2014."

Spencer's post also goes to great lengths to outline exactly why Microsoft sees the Activision acquisition as a vital way to grow its consumer base beyond the console audience. "While we love consoles, we recognize that they are not the only way that people play games. Today, the largest and fastest growing segment of gaming is mobile platforms. To reach the billions of players where they are and no matter what device they play on, we need to embrace choice," Spencer wrote. "We are expanding choice in two ways: through the creation of Game Pass, which gives players a subscription option; and by bringing more games to mobile platforms, including through our cloud game streaming technology."

Spencer said the Activision deal includes not only big console and PC franchises like Diablo and Overwatch in addition to Call of Duty, but also mobile expertise in the form of Candy Crush maker King. Combined, the deal would allow Microsoft to grow its cloud gaming initiative to bring console games to smartphones and other screens while also developing more mobile-first titles to compete in the mobile gaming market. (Sony on Monday announced it had acquired its first mobile gaming studio to develop new PlayStation titles for smartphones.)

"This promises to open up mobile gaming, creating new distribution opportunities for game developers outside of mobile app stores while delivering compelling and immersive experiences for players by using the power of the cloud," Spencer said. "And we can extend the joy of playing to devices that people already own, including Smart TVs and laptops."

A 'Soho house for techies': VCs place a bet on community

Contrary is the latest venture firm to experiment with building community spaces instead of offices.

Contrary NYC is meant to recreate being part of a members-only club where engineers and entrepreneurs can hang out together, have a space to work, and host events for people in tech.

Photo: Courtesy of Contrary

In the pre-pandemic times, Contrary’s network of venture scouts, founders and top technologists reflected the magnetic pull Silicon Valley had on the tech industry. About 80% were based in the Bay Area, with a smattering living elsewhere. Today, when Contrary asked where people in its network were living, the split had changed with 40% in the Bay Area and another 40% living in or planning to move to New York.

It’s totally bifurcated now, said Contrary’s founder Eric Tarczynski.

Keep Reading Show less
Biz Carson

Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Fintech

Binance CEO wrestles with the 'Chinese company' label

Changpeng "CZ" Zhao, who leads crypto’s largest marketplace, is pushing back on attempts to link Binance to Beijing.

Despite Binance having to abandon its country of origin shortly after its founding, critics have portrayed the exchange as a tool of the Chinese government.

Photo: Akio Kon/Bloomberg via Getty Images

In crypto, he is known simply as CZ, head of one of the industry’s most dominant players.

It took only five years for Binance CEO and co-founder Changpeng Zhao to build his company, which launched in 2017, into the world’s biggest crypto exchange, with 90 million customers and roughly $76 billion in daily trading volume, outpacing the U.S. crypto powerhouse Coinbase.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

How I decided to leave the US and pursue a tech career in Europe

Melissa Di Donato moved to Europe to broaden her technology experience with a different market perspective. She planned to stay two years. Seventeen years later, she remains in London as CEO of Suse.

“It was a hard go for me in the beginning. I was entering inside of a company that had been very traditional in a sense.”

Photo: Suse

Click banner image for more How I decided seriesA native New Yorker, Melissa Di Donato made a life-changing decision back in 2005 when she packed up for Europe to further her career in technology. Then with IBM, she made London her new home base.

Today, Di Donato is CEO of Germany’s Suse, now a 30-year-old, open-source enterprise software company that specializes in Linux operating systems, container management, storage, and edge computing. As the company’s first female leader, she has led Suse through the coronavirus pandemic, a 2021 IPO on the Frankfurt Stock Exchange, and the acquisitions of Kubernetes management startup Rancher Labs and container security company NeuVector.

Keep Reading Show less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Enterprise

UiPath had a rocky few years. Rob Enslin wants to turn it around.

Protocol caught up with Enslin, named earlier this year as UiPath’s co-CEO, to discuss why he left Google Cloud, the untapped potential of robotic-process automation, and how he plans to lead alongside founder Daniel Dines.

Rob Enslin, UiPath's co-CEO, chats with Protocol about the company's future.

Photo: UiPath

UiPath has had a shaky history.

The company, which helps companies automate business processes, went public in 2021 at a valuation of more than $30 billion, but now the company’s market capitalization is only around $7 billion. To add insult to injury, UiPath laid off 5% of its staff in June and then lowered its full-year guidance for fiscal year 2023 just months later, tanking its stock by 15%.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.

Latest Stories
Bulletins