Microsoft’s Activision Blizzard deal heads to a summer showdown with regulators

theverge.com:

By Tom Warren, a senior editor covering Microsoft, PC gaming, console, and tech. He founded WinRumors, a site dedicated to Microsoft news, before joining The Verge in 2012.

Microsoft’s appeal of the UK Competition and Markets Authority’s (CMA) decision to block its proposed Activision Blizzard acquisition will head to a hearing the week of July 24th. The appeal sets Microsoft up for two summertime battles with regulators: one against the CMA and the other against the US Federal Trade Commission (FTC), which commences with an evidentiary hearing on August 2nd.

Microsoft is focusing on the CMA’s decision to block its $68.7 billion deal largely because of cloud gaming concerns. The CMA estimated that Microsoft controls around 60 to 70 percent of global cloud gaming services, and it determined that adding control of Call of Duty, Overwatch, and World of Warcraft would give Microsoft an alarming advantage in the cloud gaming market.

In a skeleton argument filed with the Competition Appeal Tribunal today, Microsoft argues the CMA analysis makes “fundamental errors,” and it seeks to rely on four expert witnesses to push for a judicial review. Microsoft claims the CMA has failed to consider the potential for switching between cloud gaming and native gaming and says it has not correctly defined the cloud gaming market. Microsoft doesn’t offer Xbox Cloud Gaming as a standalone product, for instance, with Fortnite being the only game you can stream without an Xbox Game Pass Ultimate subscription.

The difference between a standalone cloud gaming market and an add-on service looks like it will form part of the main argument between Microsoft and the CMA during the appeals process. Microsoft sees cloud gaming as a premium add-on for