UK regulator blocks Microsoft-Activision deal
Despite recent signs that it was softening its stance on Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard, the U.K.’s antitrust regulator, the Competition and Markets Authority, has announced that it has decided to formally block the deal.
The CMA said its decision was motivated by concerns about the deal’s effect on the future of the nascent cloud gaming market, where Microsoft is a key player. It feared the deal would lead to “reduced innovation and less choice for UK gamers over the years to come.”
It said that a solution proposed by Microsoft “had significant shortcomings and would require regulatory oversight by CMA.”
“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,” the government body said, announcing the findings of its months-long review.
It reckons Microsoft “accounts for an estimated 60-70% of global cloud gaming services” already, thanks to the advantages of owning Xbox, Windows, and the Azure platform, as well as the Game Pass game subscription service to which Xbox Cloud Gaming is tied. The CMA views cloud gaming as an important, fast-growing sector of the games market that allows gamers to “avoid buying expensive consoles” and presents them with more “flexibility and choice as to how they play.”
The CMA viewed the “behavioral” remedies proposed by Microsoft, in the form of 10-year deals forcing it to make its games available to other cloud platforms, as insufficient. It said they would require regulatory oversight, did not sufficiently cover different business models such as subscriptions, and risked
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