Microsoft announced in early 2022 that it would acquire game publisher Activision Blizzard for $69 billion. It would be the biggest deal in gaming history, but the competition authorities in the EU, USA and UK want to prevent the purchase.
The British competition authority, the Competition and Markets Authority (CMA), has now blocked the multi-billion dollar takeover of video game maker Activision Blizzard by Microsoft, despite numerous concessions.
CMA sees cloud gaming market under threat
The $69 billion deal would hurt competition in the fast-growing cloud gaming market, the CMA said on Wednesday in a press release. Microsoft would gain control of key offerings like Call of Duty, Overwatch, and World of Warcraft. The measures offered by the US group could not have allayed the concerns of the antitrust authorities. Microsoft announced that it would appeal the decision. This is based on a misunderstanding of the market and how cloud technology works.
Activision shares fell more than 10 percent after the decision. “We will reassess our UK growth plans,” announced the video game maker. Microsoft’s takeover of Activision is also being examined by the EU competition authorities, who want to make a decision by May 22nd. The US agency Federal Trade Commission (FTC) filed a lawsuit against the takeover in December. The first hearing will take place in August 2023. While the CMA sees the problem primarily in cloud gaming competition, the FTC has a different view. Accordingly, the deal could create a monopoly in the markets for game subscription services, high-end consoles and cloud gaming.
Microsoft plans to continue supporting other platforms
In order to allay antitrust concerns, Microsoft President Brad Smith offered competitors licenses for the Activision bestseller “Call of Duty”. Some contracts with video game platforms have already been signed. On the other hand, Smith had ruled out breaking up video game maker Activision or selling “Call of Duty”.
Microsoft competes with its “Xbox” games console against the “PlayStation” from the world market leader Sony and, to a certain extent, with the “Switch” from Nintendo. Critics fear that the US group will no longer release popular Activision games such as “World of Warcraft” or “Guitar Hero” for its Japanese rivals after the takeover.
With material from Reuters