UK Regulators Block Microsoft's $68.7B Acquisition of Activision Blizzard

GD
26 Apr, 2023


xbox and activision
 The UK’s Competition and Markets Authority (CMA) has blocked Microsoft’s $68.7 billion deal to acquire Activision Blizzard, stating that the deal could potentially “alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.” After months of analyzing 3 million Microsoft and Activision documents and more than 2,100 emails from the public, the CMA concluded that Microsoft’s control of 60 to 70 percent of global cloud gaming services, along with the addition of control over Call of Duty, Overwatch, and World of Warcraft, would give Microsoft a significant advantage in the cloud gaming market. Microsoft has announced its intention to appeal the decision, but if unsuccessful, it will prevent the company from closing the deal.

In the lead-up to this decision, Microsoft had attempted to address concerns around cloud gaming by signing cloud gaming deals with Boosteroid, Ubitus, and Nvidia, which included access to Call of Duty and other Activision Blizzard games, if the deal was approved by regulators. However, the CMA found that these deals contained “a number of significant shortcomings” in cloud gaming services, such as not covering different cloud gaming service business models, not being sufficiently open to providers who might wish to offer versions of games on PC operating systems other than Windows, and standardizing the terms and conditions on which games are available.

Microsoft’s appeal will push back the company’s plans to close the deal by the end of July, with the possibility of an extension to the merger agreement. If Microsoft’s appeal fails, it will owe Activision $3 billion in break up fees. Regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan, and South Africa have all approved the deal, and the EU is set to make a decision by May 22nd.

Other interesting developments around this deal include:

- Sony is worried that Microsoft will sabotage Call of Duty for the PlayStation
- Microsoft recruited Nintendo and Nvidia to help fight Sony over the Activision deal
- Sony might be forced to reveal how much it pays to keep games off Xbox Game Pass
- Microsoft and Sony square off in EU showdown over Activision and Call of Duty
- Microsoft says it has offered Sony a 10-year deal on new Call of Duty games

Activision Blizzard CEO Bobby Kotick has already started work on an appeal, stating that “this deal is good for competition.” Microsoft also faces regulatory scrutiny from the Federal Trade Commission (FTC) in the US, which sued to block Microsoft’s Activision Blizzard purchase last year. An evidentiary hearing is scheduled for August 2nd, with the potential for rare details on game industry exclusivity deals to be made public if documentation is released.

Next Post Previous Post
No Comment
Add Comment
comment url