The UK’s Competition and Markets Authority (CMA) has landed a major blow to the potential outcome of Microsoft’s $69 billion proposed acquisition of Activision Blizzard, today announcing it will be blocking the sale. While the organisation cites several areas of concern regarding the deal’s potential impact on the market and consumers, the CMA took to Twitter to highlight its issues regarding Cloud Gaming in particular.
Microsoft’s proposed deal is one of the largest market consolidation deals in history, kicking off back in January 2022 and swiftly followed by several global organisations launching investigations into its potential harm to the wider video game industry. Now, the CMA has definitively decided to prevent the deal from progressing after what it claims was a failure on Microsoft’s part to adequately addressed concerns raised by the organisation in February of this year.
We’ve prevented @Microsoft from purchasing @Activision over concerns the deal would damage competition in the #CloudGaming market, leading to less innovation and choice for UK #gamers. ☁️https://t.co/SdXt1rYAkZ pic.twitter.com/prWcDI7Evt
— Competition & Markets Authority (@CMAgovUK) April 26, 2023
“The UK cloud gaming market is growing fast. Monthly active users in the UK more than tripled from the start of 2021 to the end of 2022” the CMA stated, “It is forecast to be worth up to £11 billion globally and £1 billion in the UK by 2026. By way of comparison, sales of recorded music in the UK in 2021 amounted to £1.1billion.”
In a statement released by Marcus Bokkerink, Chair, and Sarah Cardell, CEO, of CMA, the two expanded on the decision made today. “Gaming is the UK’s largest form of entertainment, and cloud gaming is the fastest growing gaming market. Microsoft already has important advantages in this market: it owns Windows, by far the leading PC operating system on which most PC games run; it has a global cloud infrastructure; and it has a strong gaming console and collection of games. No other cloud gaming operator has this combination of advantages, which partly explains Microsoft’s current UK market share of between 60-70%.”
Statement from Activision Blizzard CEO Bobby Kotick on UK’s decision to block the Microsoft deal: pic.twitter.com/O9Kw0sLYmP
— CharlieIntel (@charlieINTEL) April 26, 2023
In response to the decision, president of Microsoft Brad Smith says that they “fully committed to this acquisition and will appeal”, going on to state that “The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom.” Meanwhile, Bobby Kotick, Activision Blizzard’s CEO released a statement expressing frustration with the CMA’s decision but notes that they will be contesting the move alongside Microsoft. You can read Kotick’s full statement above.
How do you feel about the CMA’s decision? Be sure to let us know in the comments below or on social media.
One part pretentious academic and one part goofy dickhead, James is often found defending strange games and frowning at the popular ones, but he's happy to play just about everything in between. An unbridled love for FromSoftware's pantheon, a keen eye for vibes first experiences, and an insistence on the Oxford comma have marked his time in the industry.
