By Sam Boughedda
The UK's Competition and Markets Authority (CMA) has expressed concerns about Microsoft's (NASDAQ:MSFT) proposed acquisition of Activision Blizzard (NASDAQ:ATVI), stating that it could harm UK gamers.
The news has pushed Activision shares down over 3% premarket Wednesday.
The CMA conducted an in-depth investigation and said the deal raises concerns about cloud and console gaming and that the merger could make Microsoft even stronger in cloud gaming, stifling competition in the market and "harming UK gamers who cannot afford expensive consoles."
The regulator also pointed out that the deal could also weaken "the important rivalry between Xbox and PlayStation gaming consoles."
"The evidence available to the CMA currently indicates that Microsoft would find it commercially beneficial to make Activision's games exclusive to its own cloud gaming service (or only available on other services under materially worse conditions)," the CMA said.
They added that buying one of the world's most important game publishers would reinforce Microsoft's strong position and "substantially reduce the competition."
Reacting to the report, "Call of Duty" maker Activision Blizzard said it hoped to help the CMA better understand the gaming industry.
Reuters reported an Activision spokesperson as saying that "These are provisional findings," and they hope that "between now and April, we will be able to help the CMA better understand our industry."
Microsoft shares are up just under 1% premarket.