The CMA has blocked Microsoft’s Activision takeover in the UK

The CMA has blocked Microsoft's Activision takeover in the UK

Microsoft’s Activision Blizzard acquisition has been blocked in the UK

The UK’s Competition and Market’s Authority (CMA) has today confirmed that they have blocked Microsoft’s planned acquisition of Activision Blizzard, citing concerns about how the merger would impact the growing cloud gaming market. 

In their press release on the topic, the CMA stated that it was not concerned about how the merger would impact the console gaming market, which means that the CMA did not buy Sony/PlayStation’s arguments against the merger. Microsoft has confirmed that they will appeal the CMA’s decision, and that they still want the acquisition to continue.

While Microsoft has signed 10-year deals with seemingly every major cloud gaming service to help pass this deal, the CMA were not convinced that Microsoft’s remedies were alleviate the authority’s concerns. The CMA cited the following areas where they believe that Microsoft’s remedies fell short.

    Microsoft’s proposal contained a number of significant shortcomings connected with the growing and fast-moving nature of cloud gaming services:

– It did not sufficiently cover different cloud gaming service business models, including multigame subscription services.
– It was not sufficiently open to providers who might wish to offer versions of games on PC operating systems other than Windows.
– It would standardise the terms and conditions on which games are available, as opposed to them being determined by the dynamism and creativity of competition in the market, as would be expected in the absence of the merger.

The CMA has blocked Microsoft's Activision takeover in the UK

Currently, it is unknown how Microsoft will react to the CMA’s decision, aside from their decision to appeal. It is possible that Microsoft could make other concessions, though at this time it is unclear what Microsoft could do to please the CMA. 

One of the CMA’s complaints was about the ability to allow streaming services to “offer versions of games on PC operating systems other than Windows”, which is a complaint that makes little sense given the fact that no Activision Blizzard games are officially available on non-Windows OS’. This makes the CMA’s second complaint ludicrous, as it is effectively asking Microsoft to create non-Windows ports of PC games for this purpose.

We expect Microsoft to make some form of announcement regarding the current state of their Activision Blizzard deal in the near future, revealing how they plan to remedy this block from the CMA. 

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