Microsoft’s planned acquisition of publisher Activision Blizzard has been officially blocked in the UK by the Competition and Markets Authority (CMA).
The $68.7 billion acquisition was blocked on grounds that it would “alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.”
The CMA has posted a full statement on the UK Government website (along with a 415 page final report if you’re up for some light reading) that elaborates on the decision in greater detail, confirming that Microsoft’s proposed solution to its concerns “had significant shortcomings and would require regulatory oversight by CMA.”
In regards to its specific concerns, the CMA stated the following:
“The cloud allows UK gamers to avoid buying expensive gaming consoles and PCs and gives them much more flexibility and choice as to how they play. Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities.”
This wouldn’t have much of an impact on Nintendo gamers were it not for the planned 10-year commitment from Microsoft to bring Call of Duty to Nintendo platforms, announced back in December 2022.
Much like the commitment itself, the specific language is vague but it does seem as though the deal was contingent on Microsoft’s acquisition being approved by regulators. Back in February, Vice Chair and President of Microsoft, Brad Smith, tweeted to confirm “Microsoft’s strong commitment to bring Call of Duty to Nintendo’s customers if our acquisition of Activision Blizzard is approved by regulators”. There’s that key word: if.
Furthermore, when the Head of Xbox, Phil Spencer, tweeted about the initial announcement of the deal with Nintendo, he stated that this would occur “following the merger of Microsoft and Activision Blizzard King”. Indeed, if the acquisition doesn’t close, Microsoft’s deal with Nintendo may be equally dead in the water.
Microsoft has confirmed that it will appeal the decision by the CMA, as demonstrated in a rather sour statement from Brad Smith himself:
So, the drama continues! Given that Microsoft has confirmed it will appeal this decision, it doesn’t seem likely that we’ll see the end of this for quite some time. Regardless of the small print on the signed commitment, reneging on the Nintendo COD agreement wouldn’t be the best look for Microsoft and Uncle Phil given their talk of a big inclusive industry, although it wouldn’t be surprising.
One thing’s for certain: Jim Ryan, President and CEO of Sony Interactive Entertainment, is likely feeling pleased right about now. Let’s see how the appeal goes.
What do you make of the CMA’s decision over Microsoft’s planned acquisition of Activision Blizzard? Do you think it will eventually go through? Share your thoughts with a comment below.