The UK government’s Competition Market Authority (CMA) has announced that it has “blocked” Microsoft’s proposed takeover of Activision Blizzard. The move shocked the gaming industry.
In a press release announcing the planned acquisition, CMA said (opens in new tab) “Microsoft’s proposed acquisition of Activision has been blocked by growing concerns that it will change the future of the burgeoning cloud gaming market, leading to less innovation and less choice for UK gamers in the coming years. ‘ said.
Microsoft’s proposed acquisition of Activision Blizzard has been scrutinized by government agencies around the world, with many expressing concerns that the proposed merger would give Microsoft an unfair market advantage. The US Federal Trade Commission still has a pending lawsuit against Microsoft on the grounds that Microsoft has violated antitrust laws and may be on the verge of creating a monopoly. The first trial is August 2nd.
in the report Available on UK Government website (opens in new tab) , the CMA elaborated on its position. Games that have an incentive to withhold these games from their competitors and significantly undermine competition in this important and growing market.
Do not go through “Go” (Image credit: Activision Blizzard) The CMA’s decision had a significant impact on Microsoft’s work, which planned to enter into a merger agreement within days, hoping for CMA approval (Via New York Post (opens in new tab) ). With the hearings in August, it looks like Microsoft will have no choice but to address his FTC concerns directly.
However, the CMA has made clear that there are steps Microsoft can implement to alleviate government oversight concerns. In its report, the CMA found that Microsoft’s proposed remedy for the monopoly issue relied heavily on a system of “regulatory obligations” such as Microsoft’s historic Switch deal with Nintendo.
It looks like Microsoft should address the FTC’s concerns directly.
The report said that in the context of a “rapidly evolving” market, agreements of this kind could evolve “in different ways over time”, leading to unforeseen consequences that could adversely affect consumers. I concluded that there is.
However, if Microsoft addresses these concerns with new proposals, it’s certainly possible that the merger will be approved in a new form later.
Don’t Collect $69 Billion (Image credit: Activision Blizzard) In the meantime, both Microsoft and Activision Blizzard appear to be showing a firm commitment to the merger. Activision Blizzard released an official media statement outlining its desire to “actively work with Microsoft to overturn this on appeal.” The statement continued: Reevaluate UK growth plans. Innovators big and small in the world will find that, despite all the rhetoric, the UK is clearly shutting down business. ”
However, despite Activision’s saber-rattling, the CMA’s decision could be a positive turnaround for the video game industry. The CMA has found that as it stands, Microsoft owns his 60-70% of the UK cloud-based gaming market. While it was definitely a big deal at the time of writing, Activision Blizzard’s acquisition could see companies like Xbox Game Pass establish dominance in the market, leading to higher prices.
CMA decision likely to be a positive change in direction for the video game industry
That said, the CMA was happy with Microsoft’s efforts to prevent a monopoly in the “console game services” space. Microsoft’s commitment to bring Call of Duty to the Nintendo platform after the merger and CMA allay concerns about consoles, ruling “Microsoft doesn’t think it makes financial sense to make CoD exclusive to Xbox” It helped me a lot. market. On this basis, Microsoft could successfully acquire Activision Blizzard at a later date if similar tactics were implemented with respect to cloud gaming.
The CMA has made its position clear and the ball is at Microsoft’s discretion.
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