The largest acquisition ever in the gaming industry is further questioned. Microsoft plans to take over game publisher Activision Blizzard for the equivalent of 60 billion euros, but the British competition watchdog rejected that deal today. The US regulator has already filed a lawsuit to do the same.
British regulator CMA says in a press statement it is particularly concerned about the future of cloud gaming – where a game is streamed (much like music or a movie) to a device – if the acquisition were to go ahead. Microsoft says it remains “fully committed” to the acquisition and will appeal the decision.
‘Powerful position’
“Microsoft already has a powerful position and a competitive edge in cloud gaming,” said Martin Coleman, who led the British study. “This acquisition would strengthen that lead and thus give it the opportunity to undermine new and innovative competitors.”
According to the CMA, Microsoft already has a 60 to 70 percent market share of the global cloud game market. Consumers who play games in this way do not have to buy expensive game consoles or PCs, according to the regulator, which gives them “a lot more flexibility and choice over how they play”.
The deal between Microsoft and Activision Blizzard was announced last January. The CMA began an extensive investigation in September of that year. In February of this year, a provisional decision was already made, which has now become final.
Worries not taken away
In that process, Microsoft presented options to address regulator concerns. But those contain a series of shortcomings in the eyes of the CMA.
Another consideration was that accepting Microsoft’s solutions would mean that the CMA would also have to oversee this, while a rejection would mean that the cloud gaming market could continue to develop without intervention.
Microsoft president Brad Smith said he was “disappointed that after lengthy discussions, this decision appears to reflect a lack of understanding of the market and of how cloud technology actually works.”
Activision Blizzard says it will work intensively with Microsoft to reverse this decision in an appeal procedure. In addition to the US and the UK, the company is also awaiting approval from the EU. A decision on this is expected next month.
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