Microsoft’s Attempted Takeover of Activision Blizzard Blocked by UK Regulator
Microsoft’s bid to acquire Activision Blizzard, the developer behind popular video games such as Call of Duty, has been blocked by the UK’s Competition and Markets Authority (CMA). The proposed $68.7bn acquisition was halted due to concerns that it would stifle competition in the cloud gaming market. The merger would have created a gaming giant, combining Activision’s impressive portfolio of « AAA » titles, including World of Warcraft, Hearthstone, Candy Crush Saga, and Overwatch, with Microsoft’s Xbox consoles, first-party developers, and control of PC gaming.
The CMA’s decision appeared to be leaning in Microsoft’s favor after the company announced that it would make Call of Duty available on other platforms for at least a decade. However, the regulator ultimately decided that the acquisition would harm competition in the market. The decision is a significant blow to Microsoft’s gaming ambitions, as it would have given the company a dominant position in the industry.
Concerns Over Competition in the Cloud Gaming Market
The CMA’s decision to block Microsoft’s acquisition of Activision Blizzard was based on concerns that the deal would harm competition in the cloud gaming market. Cloud gaming is an emerging technology that allows users to stream games over the internet, eliminating the need for expensive hardware. Microsoft’s Xbox Game Pass Ultimate and Google’s Stadia are two examples of cloud gaming services that are currently available.
The CMA was worried that the acquisition would give Microsoft too much control over the cloud gaming market, making it difficult for other companies to compete. The regulator’s decision is a reminder that even the biggest players in the industry are subject to antitrust laws and must be careful not to stifle competition.
The Future of Gaming Mergers and Acquisitions
The CMA’s decision to block Microsoft’s acquisition of Activision Blizzard is likely to have a significant impact on the future of gaming mergers and acquisitions. The gaming industry has seen a wave of consolidation in recent years, with companies looking to gain a competitive edge by acquiring popular game developers.
However, the CMA’s decision shows that regulators are willing to intervene to prevent mergers that could harm competition. As the gaming industry continues to grow and evolve, it will be interesting to see how regulators balance the need to protect competition with the desire to encourage innovation and growth.
Keywords: Microsoft, Activision Blizzard, UK regulator, Competition and Markets Authority, cloud gaming, antitrust laws, gaming mergers and acquisitions.