Microsoft’s acquisition of Activision Blizzard hasn’t exactly been smooth sailing, but it has now been hit with its biggest setback yet. In a Gov.uk press release, UK regulators (the CMA) have decided to block the Microsoft and Activision Blizzard deal to “protect innovation and choice in cloud gaming.”
According to the CMA, “Microsoft already accounts for an estimated 60-70% of global cloud gaming services and has other important strengths in cloud gaming from owning Xbox, the leading PC operating system (Windows) and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming).”
By allowing the deal to go ahead, there are concerns that Microsoft will have even more control of the market which is supposed to be competitive, allowing for innovation and choice. The CMA explicitly reference “Call of Duty, Overwatch, and World of Warcraft” as being “important gaming content” that Microsoft will gain control of as a result of the acquisition.
Microsoft’s response to the UK blocking the Activision Blizzard deal
In a statement released on April 26, Microsoft highlight that they’re still committed to the merger and intend to appeal the decision. Brad Smith, the Vice Chair and President at Microsoft, believes that “the CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK.” Behind the scenes, the deal was already making progress, with contracts being signed “to make Activision Blizzard’s popular games available on 150 million more devices.”
Its unclear what this decision means for the acquisition and the impact it will have on Activision Blizzard’s franchises. Additionally, the extent to which the UK deciding to block the Microsoft and Activision deal will hinder discussions in other countries is unknown. With a long appeal process up ahead, this won’t be the last we hear of the Microsoft and Activision Blizzard deal.
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