UK regulator blocks Microsoft's Activision Blizzard deal over cloud concerns

gamedeveloper.com:

UK regulator the Competition and Markets Authority (CMA) has blocked Microsoft's proposed Activision Blizzard merger over fears the deal will "alter the future of the fast-growing cloud gaming market."

In a press release, the CMA said the deal–in its current form–could result in "reduced innovation and less choice for UK gamers over the years to come."

The CMA previously appeared to be softening its stance after investigating the deal for months, with the regulator recently suggesting that its previous concerns over the exclusivity of key Activision Blizzard franchises such as Call of Duty had been addressed.

Now, however, the CMA has made the "final decision" to prevent the deal because Microsoft has failed to effectively address its concerns about how the deal might impact the cloud gaming sector.

"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," wrote the CMA, explaining the UK cloud gaming market is forecast to be worth up to £11 billion globally and £1 billion in the UK by 2026.

"Microsoft already accounts for an estimated 60-70 percent 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 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