Microsoft could be asked to agree to sell off the Call of Duty franchise in order for its contested takeover of Activision Blizzard to get the go-ahead from the UK government regulator.
The Competitions and Markets Authority says the deal in its current form has the potential to “harm UK gamers” who can’t afford consoles and damage the important rivalry between Xbox and PlayStation. Central to that argument is the fate of the Call of Duty franchise.
“Xbox and PlayStation compete closely with each other at present and access to the most important content, like CoD, is an important part of that competition,” the CMA said in a press release. “Reducing this competition between Microsoft and Sony could result in all gamers seeing higher prices, reduced range, lower quality, and worse service in gaming consoles over time.”
The CMA said it surveyed 40,000 Call of Duty PlayStation gamers, and 24% of them said they’d head for Xbox should it become exclusive to the Microsoft-owned platforms. Microsoft has promised that won’t be the case.
As a result of its investigation of the proposed takeover, the CMA is suggesting two structural remedies (pdf). The second of them is completely prohibiting the merger. So what options do the CMA say Microsoft has to get it over the line?
Well… they’re not very attractive.
(i) Divestiture of the business associated with Call of Duty;CMA
(ii) Divestiture of the Activision segment of Activision Blizzard,Inc.(the Activision segment), which would include the business associated with Call of Duty;
(iii) Divestiture of the Activision segment and the Blizzard segment (the Blizzard segment) of Activision Blizzard, Inc., which would include the business associated with Call of Duty and World of Warcraft, among other titles.
Essentially, any one of those solutions would probably undermine Microsoft’s desire to complete the deal anyway. Why pay $70 billion for something when you’ll immediately have to sell off the element of most value?