UK Regulator CMA Blocks Microsoft’s Acquisition of Activision Blizzard
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The United Kingdom’s antitrust regulator Competition and Markets Authority (CMA) has made the final decision to block Microsoft’s $68.7 billion acquisition of Activision Blizzard.
It’s a major blow for Xbox and Microsoft’s lengthy process of finalizing one of the biggest acquisitions in the industry. The main concern and the major reason for their decision stem from cloud gaming, on how this acquisition will “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.”, according to the CMA.
When Microsoft made a deal to acquire Activision Blizzard back in January 2022, the CMA launched an investigation back in September 2022 and concluded that Microsoft will become a dominant competitor in the cloud gaming sector, a space where they already hold a strong position.
“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.” says the CMA.
“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).”
Despite the decision, Microsoft’s vice chair and president Brad Smith is determined to make an appeal and release this statement through Twitter:
This makes the acquisition an even longer process as Microsoft is fighting to make it official on multiple fronts. The CMA is just one of the major hurdles and already hit a major roadblock. The acquisition is still in the process of getting the approval of two other regulators – US’s Federal Trade Commission (FTC) and EU’s European Commission. In a report from Eurogamer, Microsoft is still trying to win approval from the FTC despite their own concerns while the European Commission is said to make their decision on the acquisition on May 22.
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