The Competition and Markets Authority (CMA) has blocked Microsoft's proposed acquisition of Activision Blizzard Inc (Activision) for £68.7 billion – following an in-depth investigation, given concerns over the deal's impact on the UK cloud gaming market.
In our previous article, Goodbye to Call of Duty? The War on Competition, we explored the competition concerns over the deal, giving Microsoft control over important gaming content such as Call of Duty (CoD), Overwatch and World of Warcraft.
The CMA's Review of the Deal
Since September 2022, the CMA and other competition authorities in the EU and US have been investigating the proposed deal to assess the risk it poses to competition.
Competition benefits consumers because it forces businesses to innovate new products and services and lower their prices.
In the console gaming market, Microsoft's largest competitor of its Xbox console is Sony's PlayStation console.
Microsoft is, however, the leading name in cloud gaming. Microsoft accounts for an estimated 60-70% of global cloud gaming services, the leading PC operating system (Windows) and global cloud computing infrastructure via Azure and Xbox Cloud Gaming.
The CMA previously flagged its two main concerns with the deal.
First, Microsoft having a monopoly over the console market by leveraging CoD's availability on Xbox, and secondly (and of more concern to the CMA), the impact which the deal will have on the cloud gaming sector.
The latter is the basis on which the CMA has blocked the deal.
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