THE UK’s Competition and Market Authority (CMA) has blocked gaming’s largest-ever acquisition.
Last year, Microsoft announced its intention to purchase Call of Duty publisher Activision Blizzard for almost $70billion (£55billion).
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Regulators around the world have been assessing the deal to decide whether it would cause a monopoly in the gaming industry.
Most countries have decided to allow the deal to go ahead, but the UK’s CMA announced today (April 26, 2023) its decision to block the acquisition.
The three primary reasons for doing so were based around Microsoft’s PC and cloud gaming services, rather than Xbox consoles.
The statement given by the CMA reads: “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.”
Microsoft and Xbox have created a number of deals with other consoles to continue releasing games on those platforms.
However, it is the domination of Windows as the most common PC operating system that most concerns the CMA.
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Microsoft Vice Chair and President Brad Smith has said the company will appeal the decision.
His statement reads: “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 UK.
“We have already signed contracts to make Activision Blizzard’s popular games available on 150million more devices, and we remain committed to reinforcing these agreements through regulatory remedies.
“We’re especially disappointed that after lengthy deliberations this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.”
Written by Georgina Young on behalf of GLHF.
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