UK regulator says Microsoft’s proposed $68.7B Activision merger could create ‘higher prices, fewer choices’

techcrunch.com:

Seven months after the U.K.’s Competition and Markets Authority (CMA) confirmed it was launching an antitrust investigation into Microsoft’s $68.7 billion bid for video game giant Activision Blizzard, the regulator has provisionally concluded that the merger “could harm U.K. gamers” through higher prices, fewer choices, or less innovation.

Microsoft first revealed plans for its mega-bucks Activision acquisition last January, a deal that would make Microsoft the third-biggest gaming company in the world by revenue behind Tencent and Sony. More importantly, it would also give Microsoft direct control over well-known franchises such as Call of Duty and World of Warcraft.

The deal has garnered significant scrutiny from the get-go, with various bodies around the globe noting that Microsoft could use its clout to limit the distribution of Activision Blizzard games to rival distributors and platforms. The European Union (EU) is currently engaged in an in-depth probe and reportedly issued Microsoft a formal warning last week, while the Federal Trade Commission (FTC) in the U.S. is suing to block the deal. The U.K., meanwhile, announced its in-depth investigation back in September, noting at the time that the merger could result in a “substantial lessening of competition” in the U.K. gaming market.

Now the U.K. has pretty much cemented that hypothesis in stone, saying that if the deal was greenlighted, it may strengthen Microsoft’s cloud gaming credentials and stifle competition, leading to higher prices if Microsoft were to drive rival gaming companies out of the market.

Specifically, the CMA said that the deal could weaken Microsoft’s rivalry with Sony, which operates the competing PlayStation console. Call of Duty, for example, is