- UK blocks Microsoft takeover of Activision Blizzard over competition concerns
- Microsoft and Activision Blizzard are appealing the decision and awaiting the opinion of the European Union
- This $68.7 billion takeover is the largest in the history of this industry
After a first refusal in the United States in February 2023, it’s the turn of the UK to block the acquisition of Activision Blizzard by Microsoft. A clap of thunder when everything led to believe that the operation would find a favorable outcome. The British competition authority, the CMA (Competition and Markets Authority), announced on April 26, 2023 its decision to prohibit the operation, considering that it would have adverse effects on consumers and game developers. In particular, it fears excessive market concentration and reduced competition.
Specifically, the CMA cited two main reasons for its decision. The first is that takeover would reduce the choice and quality of games available on game consoles, especially against PlayStation, Microsoft’s main competitor. The second is that takeover would give Microsoft an unfair advantage in the field of cloud gaming, where it already has an attractive offer with its Xbox Game Pass. The CMA is concerned that Microsoft is using its Activision Blizzard-enhanced catalog to attract more subscribers to its service and to exclude or disadvantage competitors.
These arguments could be taken up by other competition regulatory authorities, which must give the green light to the operation in the various countries where Microsoft and Activision Blizzard are present.
Microsoft et Activision Blizzard font appel
Microsoft and Activision Blizzard expressed their disappointment with this decision and said they would appeal. They also recalled the commitments they had made to guarantee access to their games on all platforms and to preserve the autonomy and creativity of Activision Blizzard studios.
Microsoft, the American software and video game giant, announced in January 2022 its intention to buy Activision Blizzard, one of the largest game publishers in the world, for the record sum of 68.7 billion dollars. This project was intended to strengthen Microsoft’s position in the video game market, particularly in the field of cloud gaming, where it offers its Xbox Game Pass service. Activision Blizzard has successful franchises like Call of Duty, Warcraft, Overwatch you Candy Crush.
The acquisition of Activision Blizzard by Microsoft is not yet buried, but it takes an unexpected turn. It therefore remains to be known the opinion of the European Union, which must render its decision on this takeover before May 22, 2023. But with two major refusals in the United States and the United Kingdom, it is unlikely that the EU gives the green light unconditionally. Microsoft will therefore have to review its strategy or abandon its project.
