UK authorities block Microsoft-Activision merger
The United Kingdom's Competition and Markets Authority (CMA) has announced in a statement that it has "prevented" the planned merger between Microsoft and Activision. It did so over "concerns the deal would alter the future of the fast-growing cloud gaming market."
According to the full statement from the CMA, the decision to oppose the merger came after Microsoft failed to "effectively address the concerns in the cloud gaming sector," via its proposed solutions. Microsoft announced the $68.7 billion USD purchase of Activision Blizzard in January 2022. Regulators worldwide began reviewing the deal throughout the year, and the CMA launched its own investigation in September 2022. In February 2023 it provisionally concluded that the merger could stifle competition in the cloud gaming market.
In its section on the UK's cloud gaming market, the CMA said the Microsoft "already accounts for an estimate 60%-70% of global cloud gaming services" and that the deal would "reinforced Microsoft's advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft."
For its part, Microsoft issued a statement via Vice-chair and President Brad Smith issued a statement, saying:
"We remain fully committed to this acquisition and will appeal. The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom. We have already signed contracts to make Activision Blizzard’s popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. We’re especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works."