UK Regulators Block Microsoft's Acquisition Of Activision Blizzard Over Cloud Gaming Concerns
The Competition and Markets Authority, a U.K. regulatory agency that serves the same function as the Federal Trade Commission in the U.S., has blocked Microsoft's pending $68.7 billion acquisition of Activision Blizzard over cloud gaming concerns.
This news is somewhat shocking, as quite a few experts predicted the CMA would allow the deal to go through, and while this block presents a large barrier to Microsoft's progress forward toward this acquisition, it's not a be-all, end-all for the purchase. Microsoft says it remains dedicated to this acquisition and will appeal the CMA's ruling.
As for why the CMA is moving to prevent the acquisition, it cites 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,» in its official announcement.
«The final decision to prevent the deal comes after Microsoft's proposed solution failed to effectively address the concerns in the cloud gaming sector, outlined in the Competition and Markets Authority (CMA) provisional findings published in February,» it continues. «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.»
It says elsewhere in the announcement that this 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» and that «evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future.»
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