The UK’s Competition and Markets Authority (CMA) has revealed in a newly-published report today that it has blocked the proposed acquisition of Activision Blizzard by Microsoft.
Unsurprisingly, the Xbox format holder has revealed that it will work to appeal the decision, although for now, the CMA has blocked the acquisition due to concerns it would “alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.”
The CMA has prevented Microsoft’s proposed purchase of Activision over concerns the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come. Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service.
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).
Brad Smith, President of Microsoft, said the hardware manufacturer was “disappointed” by the CMA’s decision and plans to appeal.
We remain fully committed to this acquisition and will appeal. 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.
Activision Blizzard is the owner of a number of the games industry’s biggest franchises, such as Call of Duty, Diablo, Overwatch, and World of Warcraft among others.
[Source – VGC]