UK moves to block Microsoft’s acquisition of Activision Blizzard

While Microsoft was able to convince the UK's Competition & Markets Authority that its acquisition of Activision Blizzard would not harm the console gaming market, it would seem the CMA was not convinced that the deal wouldn't impede competition in the cloud gaming market. 

According to the CMA, Microsoft accounts for as much as 70 percent of the global cloud gaming market and due to its other strengths in operating systems with Windows and cloud infrastructure with Azure, the CMA has concluded that Microsoft's acquisition of Activision Blizzard would provide a pathway to monopolising the market.

While Activision has publicly stated that it would not be pursuing certain deals, like putting Call of Duty on subscription services, without Microsoft's acquisition. However, the CMA says it has evidence that Activision would offer its games more broadly to cloud gaming providers in the near future independently of Microsoft.

The CMA says Microsoft's remedy proposal had “a number of significant shortcomings”, claiming it did “not sufficiently cover different cloud gaming service business models” and that it was “not sufficiently open to providers who might wish to offer versions of games on PC operating systems other than Windows”.

Microsoft's large presence in multiple parts of the tech sector seems to be the big hang-up here. While the CMA is opting to block the deal, Microsoft has said it will appeal the ruling. Microsoft is also going to court against the FTC in the US to try and push the merger through. Presumably, if the EU moves to block the deal, Microsoft would appeal there too.

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KitGuru Says: It seemed like things were trending in the right direction for Microsoft, so this final decision does seem somewhat shocking. If Microsoft needs to embark on a number of appeals, then it will need to extend the deadline for the deal, which is currently set at mid-July. 

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