- The UK’s Competition and Markets Authority (CMA) has cast its decision regarding Microsoft’s proposed acquisition of Activision Blizzard, looking to prevent any such deal.
- The CMA cited concerns around cloud gaming, and how the addition of Call of Duty would strengthen its position in that space.
- Microsoft says it plans to appeal the CMA’s decision.
Only last week South Africa’s Competition Commission gave Microsoft the green light to go ahead with its proposed acquisition of Activision Blizzard. While our local regulator has okayed the deal, those in the UK have not.
This is as the UK’s Competition and Markets Authority (CMA) has delivered its decision regarding the deal.
The watchdog has cited concerns over what the deal would mean for cloud gaming in the region should it be completed, especially given Microsoft’s already strong position in that space, as well as the impact that bringing the Call of Duty franchise under its remit could lead to.
“The final decision to prevent the deal comes after Microsoft’s proposed solution failed to effectively address the concerns in the cloud gaming sector,” the CMA explained in a press statement.
“Microsoft entered into a $68.7 billion deal to buy Activision, one of the most popular video games publishers in the world, in January 2022. The CMA launched an in-depth review of the deal in September 2022, and in February 2023 provisionally found that the merger could make Microsoft even stronger in cloud gaming, stifling competition in this growing market,” it added.
The decision is not unexpected, as the CMA outlined its stance regarding the deal only a few months ago.
“Microsoft already accounts for an estimated 60-70% of global cloud gaming services and has other important strengths in cloud gaming from owning Xbox, the leading PC operating system (Windows) and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming),” the CMA’s findings highlighted.
“The deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft. The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future,” it asserted.
Naturally, Microsoft plans to contest this decision, as it not only wants the deal to be pushed through but also views the UK as a key territory as far as gaming is concerned.
“We remain fully committed to this acquisition and will appeal,” Microsoft president Brad Smith told The Verge in a statement.
“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom. We have already signed contracts to make Activision Blizzard’s popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. We’re especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works,” he added.
Either way discussions around this deal are far from over, but it remains to be seen whether an appeal can help get it over the line in the UK. That said, regulators in the United States, as well as other large markets in the EU and Asia, are yet to fully weigh in.
