Microsoft’s Activision Purchase Blocked by UK Regulators
Microsoft’s Activision purchase has been the focus of countless headlines. It started with Microsoft’s announcement way back in 2022. It’s been a year since, and the deal still spurs controversy. Sadly for Microsoft, it looks like it’s not happening.
Earlier today, the CMA (Competitions and Markets Authority) gave the news. As it seems, Microsoft failed to resolve the regulator’s concerns. Some sources say that Microsoft is, or will, appeal the decision. But, it’s pretty easy to see the decision sticking.
So, what really happened? Let’s find out!
The reason Microsoft’s Activision purchase got blocked
According to the CMA, it would be too much of a competitive advantage.
The regulator stated that Microsoft failed to address the entity’s concerns. The $68.7 billion deal would’ve given Microsoft too much of an advantage. The result would stifle competition in a growing market.
Microsoft proposed a solution to ease the regulator’s worries. Yet, the corporation already has a formidable position in cloud gaming. The corporation already enjoys Xbox, Windows, and global cloud gaming infrastructure.
Therefore, the deal would’ve reinforced the corporation’s advantage. Activision’s IPs are among the most popular in the gaming market. By forbidding the deal, Activision would benefit other cloud platforms.
The concerns regarding cloud gaming in the UK
Let’s remember that cloud gaming is still a fairly new market.
The cloud gaming market in the UK is growing quickly. Between 2021 and 2023, the number of users tripled. Forecasts place the market’s worth over $11 billion globally by 2026. This sum would make it overcome the recorded music market.
With Xbox, Windows, and cloud computing, Microsoft accounts for over 60% of the market. Thus, allowing the deal would give even more influence to the corporation. The result would be a potential monopoly of the cloud gaming market.
The solution that couldn’t save Microsoft’s Activision purchase
Well, at least they can say they tried, right?
Microsoft proposed a remedy that would set requirements for the corporation. Said requirements include what games it would offer to other platforms. It also set out additional conditions over a 10-year period.
However, the proposal contained several shortcomings. These are related to the cloud gaming services’ fast-growing nature.
Firstly, the proposal didn’t cover different cloud gaming business models. Secondly, it wasn’t open enough for game providers. Finally, it would standardize terms and conditions for game availability.
Overall, the proposal would—still—give too much power to Microsoft. The corporation would have too much influence over the market. Therefore, it would undermine market competition’s influence on game availability.
What do you think? Could Microsoft’s appeal tackle these concerns effectively? Or, has the deal become a part of history? Let me know in the comments!