The UK’s Competition Markets Authority (CMA) has announced that they’re preventing Microsoft’s long-awaited $68.7 billion acquisition of Activision Blizzard from going through, citing concerns that the deal will damage competition in the Cloud Gaming market.
The CMA’s announcement, coming on April 26, explained that allowing it would limit choice and lead to less innovation for UK games. They 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, outlined in the Competition and Markets Authority’s (CMA) provisional findings published in February.”
It comes as a major blow to Microsoft, who have been pushing to get the acquisition over the line since it first broke in January 2022. The move has been vehemently opposed by Sony, who have even claimed that it could lead to a much poorer performance of Activision titles on PlayStation consoles.
The CMA continued: “Accepting Microsoft’s remedy would inevitably require some degree of regulatory oversight by the CMA. By contrast, preventing the merger would effectively allow market forces to continue to operate and shape the development of cloud gaming without this regulatory intervention.”
Martin Coleman, the chair of the committee evaluating the merger, praised Microsoft’s communication and attempts to remedy the CMA’s concerns, but ultimately said it would have negatively affected competition to a too greater degree.
Microsoft recently announced a partnership with Ubitus, a pro-NFT Cloud Gaming company, and have been pushing Cloud Gaming towards Xbox gamers.
As expected, Microsoft and Activision have responded, noting their disappointment in the decision. The former promised to appeal the decision, saying: “We remain fully committed to this acquisition and will appeal. The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom.”
Activision described the CMA’s move as a “disservice to UK citizens” and pledged to “reassess our growth strategy in the UK”.
There’s bound to be more developments in the near future, so stay with us on Twinfinite.
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