Microsoft’s bid to buy Activision Blizzard was blocked by the UK Competition and Markets Authority (CMA). After months of investigation, the regulator released its final report on the $69 billion deal today, explaining that it blocked the deal on concerns that it would “change the future of the rapidly growing cloud gaming market and lead to fewer innovations and fewer options for UK gamers in the years to come”.Sony, winner of Microsoft and Activision Blizzard deal
The decision is the most significant development so far in Microsoft’s struggle to make the acquisition. The UK regulator, along with the EU and the US, is seen as one of the most influential in determining the fate of the agreement.
In the US, the Federal Trade Commission sued Microsoft to block the deal due to competition concerns. The EU is still investigating. On the other hand, Microsoft has confirmed that it will appeal the CMA’s decision. The UK underlines that after the acquisition, Microsoft will be very strong in the growing cloud gaming market. It is highlighted in the published report that the company already has a strong position in cloud gaming services, and that Microsoft will find it commercially beneficial to make Activision’s games private to its own cloud gaming service.The CMA estimates that Microsoft controls about 60 to 70 percent of global cloud gaming services, and the addition of control over Call of Duty, Overwatch and World of Warcraft will give Microsoft a significant edge in the cloud gaming market. On the other hand, Sony has been completely against this deal from the very beginning. And it looks like Sony has emerged victorious from this pocket.
Microsoft will appeal the decision
Microsoft President Brad Smith said the company was “disappointed” by the CMA’s decision and said they will appeal: “Our commitment to this acquisition is complete and we will appeal. CMA’s decision rejects a pragmatic way to address competition concerns and the UK It discourages technology innovation and investment in. We have already signed agreements to make Activision Blizzard’s popular games available on 150 million more devices, and we are determined to strengthen those agreements with legal solutions.”
Microsoft may owe Activision
Activision said it would work with Microsoft on the appeal and criticized the CMA for “harming UK citizens”. On the other hand, it will now be in other regulatory bodies and Microsoft’s appeals fight. If Microsoft’s CMA appeal fails or fails to get approval from other regulators, it will owe Activision $3 billion in break-up fees.Regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan and South Africa have all ratified the agreement. The EU will make a decision by 22 May. Microsoft is also under the scrutiny of the US Federal Trade Commission. A critical hearing is scheduled for August 2.
59306
