A wasted dream; Britain blocked the $70 billion deal between Microsoft and Activision
In an unexpected turn, the UK’s Competition and Markets Authority (CMA) announced that it would not allow the $68.7 billion deal between Microsoft and Activision Blizzard to go ahead. Britain says it reviewed three million documents and more than 2,100 emails related to Microsoft and Activision in recent months and concluded that the deal in question could “change the future of the fast-growing cloud gaming market and stifle innovation.” And less choice for British gamers.”
Britain’s final decision deals a fatal blow to Microsoft’s big ambitions to close the Activision deal. The UK’s Competition and Markets Authority says Microsoft has a strong position in the cloud gaming service market and evidence shows that it would be commercially advantageous for Microsoft to “exclusively play Activision games for the Xbox cloud gaming service”.
According to the British Competition and Markets Authority, Microsoft has about 60-70% of the global cloud gaming market. Britain says that taking control of major games such as Call of Duty, Overwatch and World of Warcraft will increase Microsoft’s power in the gaming industry too much.
Since the Microsoft and Activision contract became the media, many regulatory bodies around the world started their criticisms. Aware of this, Microsoft has tried to address concerns in recent months. The company signed a business deal focused on cloud gaming services to add Xbox games to Boosteroid and Ubitus services. Microsoft also signed a contract with Nintendo. The 10-year deal with Nintendo, which is subject to the completion of the Activision acquisition, includes the Call of Duty series of games.
Britain’s Competition and Markets Authority says it has studied the contracts in question and found “several significant failings” in them. One thing the UK has criticized is the lack of coverage of different cloud gaming business models, such as multi-game subscription services.
Last month, the UK Competition and Markets Authority initially sided with Microsoft in the dispute between Microsoft and Sony over the Call of Duty games, saying that it would be very costly for Redmond to monopolize this collection.
Microsoft in a statement that for Verge It says it is appealing the UK Competition and Markets Authority’s decision. Brad SmithThe head of Microsoft announces the company’s “full commitment” to the Activision contract. Smith says the UK’s final decision reflects an “incomplete understanding” of the cloud gaming market.
In order to close the Activision contract in addition to the UK, Microsoft must also get the opinion of the regulatory bodies of the European Union and the United States. Unconfirmed reports say the deal will be approved by Europe.
Following the publication of the British statement, the value of Activision’s shares fell by about 10%.