Microsoft Corp.’s proposed $69 billion takeover of games developer Activision Blizzard Inc. faces an in-depth European Union probe after regulators said they’re concerned the software giant could thwart access to blockbuster franchises such as Call of Duty.
The European Commission said in a statement on Tuesday that Microsoft may “foreclose access to Activision Blizzard’s console and PC video games, especially to high-profile and highly successful games.”
The EU’s merger watchdog set a March 23 deadline for its so-called phase 2 investigation.
The combination with Activision — which owns some of the most popular games also including World of Warcraft and Guitar Hero — would make Microsoft the world’s third-largest gaming company and boost the Xbox maker’s roster of titles for its Game Pass subscribers.
But the deal is already facing protracted scrutiny from antitrust agencies across the globe.
Microsoft last month accused the UK’s Competition and Markets Authority of relying on “self-serving” input from rival Sony Group Corp in its deliberations.
The US Federal Trade Commission is also reviewing the transaction, including looking into how it might impact workers.
Microsoft said in a statement it will work with the EU to address any “valid” marketplace concerns.
“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” the company added.
Activision Chief Executive Officer Bobby Kotick said in a letter to employees that the company is working “cooperatively with regulators in other jurisdictions, and the process is moving along as we expected.”
He added that he anticipates the deal to close in Microsoft’s current fiscal year ending next June.
The EU last month quizzed video games developers, publishers, distributors, competing operating systems and providers of cloud services about the possible negative effects of the deal.
EU regulators said Tuesday their preliminary probe showed the deal could “significantly reduce competition on the markets for the distribution of console and PC video games,” including multi-game subscription services, cloud game streaming services, and for PC operating systems.
The deal could give Microsoft “the ability, as well as a potential economic incentive, to engage in foreclosure strategies” with rival distributors of console video games, the EU watchdog said.
The commission said it sees the same risk for rival providers of PC operating systems.