- The UK Competition and Markets Authority blocks the sale of Activision Blizzard to Microsoft due to competition concerns in the cloud gaming market.
- Microsoft sought to allay concerns by offering 10-year deals to Sony, Nintendo and other companies to keep bringing Call of Duty to their platforms, but long-term fears linger.
- Microsoft has yet to convince the US Federal Trade Commission, which filed a lawsuit to block the deal on “antitrust” grounds in early 2023.
The UK Competition and Markets Authority (CMA), surprisingly, decided to block the sale of Activision Blizzard to Microsoft on Wednesday, April 26.
The British body says that opposes the agreement because there are “competitive concerns” in the cloud gaming market.
According to the CMA, with the purchase, if it were completed, Microsoft could make Activision games (with Call of Duty as the main one) exclusive to its cloud gaming platform, Xbox Game Pass, affecting the rest of the players. of the market, especially Sony’s PlayStation.
Cloud gaming is a technology that allows players to access titles remotely directly connected to the companies’ servers.
Although it is in its initial stage, Microsoft is betting all its effort in that this technology is the most conventional way of playing.
It must be remembered that Microsoft announced its intention to buy Activision Blizzard more than a year ago, in February 2022, for the impressive amount of 69 billion dollars.
If finalized, it will be one of the largest agreements that have occurred in the history of the video game industry.
Activision has very lucrative franchises like Call of Duty and Candy Crush Saga, which would come under the control of Microsoft.
The problem is that Microsoft’s competitors (basically Sony and Nintendo) are concerned that the purchase could give the American giant almost total control of the video game market. That amounts to about 200 billion dollars annually.
The biggest concern is that Microsoft will end distribution access to Activision’s Call of Duty for other platforms, such as PlayStation.
Sony, in particular, is the most difficult if that were to happen, because a large part of its players are fans of Call of Duty and, if Microsoft does not “open” the game to consoles other than Xbox, it will be in serious trouble.
Will Activision Blizzard be part of Microsoft?
Microsoft sought to allay that concern by offering Sony, Nintendo and other companies 10-year deals to keep bringing Call of Duty to their respective platforms, but the fear is that in the long run, that opening will close.
Microsoft’s Brad Smith said in March that his company has offered Sony the same deal it did Nintendo: make Call of Duty available on PlayStation at the same time as Xbox, with the same features. But Sony is still opposed to buying Activision Blizzard.
The problems in the United Kingdom are not the only ones for Microsoft, since it still has to convince the Federal Trade Commission of the United States, which in early 2023 filed a lawsuit to block the agreement for “antitrust”.
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