The New York Times (NYT) is reporting that Microsoft's legal team expects its proposed $68.7 billion acquisition of Activision Blizzard to be opposed by UK regulator the Competition and Markets Authority (CMA).
Four anonymous sources "briefed on the matter" told the publication that Microsoft believes the CMA, which is currently investigating the deal over concerns it could give the Xbox maker an advantage over rivals like Sony and Nintendo, will block the merger.
Some of those sources claim that Microsoft hoped it could persuade the regulator to approve the transaction after making concessions, but the NYT report suggests the company isn't exactly optimistic about its chances of sealing the deal in the UK.
Last month, the CMA extended the deadline for its investigation into the merger, and will now be publishing its final report into the potential risks of the deal on April 26, 2023.
The deal is also currently being investigated by the European Commission, and has been blocked by U.S. regulator the Federal Trade Commission (FTC) over fears it could harm competition.
"Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets," wrote the FTC's Bureau of Competition director Holly Vedova, back in December 2022.
Microsoft has repeatedly refuted the assertion that approving its Activision Blizzard deal will allow it to foreclose rivals by making key franchises like Call of Duty platform exclusives, and said it has offered to keep the popular series on rival platforms for at least a decade.
"Sony is the console market leader and it would defy business logic for us to exclude PlayStation gamers from the Call of Duty ecosystem," said Microsoft communications lead Frank X. Shaw in January. "Our goal is to bring Call of Duty and other games—as we did with Minecraft—to more people around the world so they can play them where and how they want."
The company has also taken issue with some of the views shared by Sony, and recently claimed the PlayStation maker has been misleading EU regulators over the potential impact of the deal.
Game Developer has reached out to Microsoft for comment on the NYT report
Update (02/07/23): A Microsoft spokesperson has told Game Developer that its legal team hasn't indicated the deal will be blocked in the UK and that the company has a "strong case" in the country.