UK regulators block Microsoft's Activision acquisition in potentially fatal surprise blow
The UK's Competition and Markets Authority (CMA) has unexpectedly moved to block Microsoft's $69 billion acquisition of Activision Blizzard(opens in new tab) over concerns the merger would «alter the future of the fast-growing cloud gaming market».
In a statement made today(opens in new tab), the CMA said «The final decision to prevent the deal comes after Microsoft’s proposed solution failed to effectively address the concerns in the cloud gaming sector». Those concerns were raised in the regulator's findings last February(opens in new tab), when the CMA provisionally said it would oppose the deal over its concerns regarding cloud gaming.
So, clearly, everyone saw this coming, right? Not quite. Despite the dour prognosis that February's provisional findings seemed to serve up, the CMA underwent something of a U-turn(opens in new tab) last month, announcing that «a significant amount of new evidence» had convinced it that an MS buyout of Activision would «not result in a substantial lessening of competition in relation to console gaming in the UK» insofar as Call of Duty was concerned.
To many onlookers, that announcement appeared to set the stage for an approval this month, which would in turn clear the way for an EU approval in May(opens in new tab). But the CMA's concerns about cloud gaming look to have derailed that potential course of events.
The CMA said that Microsoft, which already «accounts for an estimated 60-70% of global cloud gaming services,» would «find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service» in the event the acquisition went through.
«The deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content
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