The UK competition authority has blocked Microsoft’s purchase of Activision Blizzard. The decision of the CMA (Competition and Markets Authority) has been against all odds, since a month ago it presented a preliminary report in which it considered that this operation –valued at 68,700 million dollars and the largest in the history of entertainment– was not a threat to industry and consumers.
Now, however, the UK government’s antitrust body “has prevented Microsoft’s proposed purchase of Activision due to concerns that the deal would disrupt the future of the fast-growing cloud gaming market, leading to a reduction in innovation and less choice for UK players in the coming years.â€
The CMA has put the accent on the game in the cloud and not so much on the games that Microsoft would obtain if that purchase was approved, such as Call of Duty, World of Warcraft or Candy Crush. In its report, the regulatory body maintains that “Microsoft has a strong position in cloud gaming services and the available evidence shows that it would be commercially beneficial for Microsoft to make Activision games exclusive to its own online gaming service.” Cloud”.
According to the British regulator, the acquisition of Activision Blizzard would give Microsoft an unfair competitive advantage in cloud gaming: “Microsoft already represents approximately 60-70% of global cloud gaming services and has other significant strengths in gaming. in the cloud by owning Xbox, the leading operating system for PC (Windows) and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming)â€.
The response from Microsoft has not been long in coming. The president of the American giant, Brad Smith, has commented in GamesIndustry that the company “remains totally committed to this acquisition” and they have announced that they will appeal the decision of the regulatory body. “The CMA decision rejects a pragmatic way to address competition concerns and discourages technological innovation and investment in the UK,†says Smith.
For his part, the CEO of the video game publisher Activision Blizzard, Bobby Kotick, has also been very upset about this change of direction by the British organization: “This is not the news we wanted, but it is far from being the last word about this deal. Together with Microsoft, we can and will challenge that decision, and have already started working to appeal to the UK Court of Appeal.”
Last February several Microsoft executives, including Smith, traveled to Brussels to try to convince the European Commission that the purchase of Activision Blizzard would not harm competition in the video game market. Coinciding with that visit, the American company announced several agreements with which it promised to publish Call of Duty and other games for ten years on platforms such as Nvidia and Nintendo consoles.
Brussels has yet to communicate its decision, but a few months ago it filed several objections to the operation, alleging that it could give the Redmond company an unfair competitive advantage in the video game sector. A position that is in line with that of the United States Federal Trade Commission (FTC), which has also blocked the agreement, arguing that it could harm competition and users.
Meanwhile, the company that has shown a stronger position on this operation is the Japanese Sony, manufacturer of the PlayStation console. Since the purchase was announced in January of last year, it has exerted frontal opposition, and at the center of its concerns is that Call of Duty, one of the best-selling franchises of the last two decades, ends up being exclusive to Xbox.
The announcement of Microsoft’s intention to purchase Activision Blizzard was announced at the beginning of 2022 and, since then, it has been the topic that has focused today in the video game industry. More than a year later, it is still far from over.
