Back in January of 2022, Microsoft announced that it was buying Activision Blizzard in a deal worth $68.7 billion.
The deal has yet to be finalized as regulators like the FTC in the USA and the UK’s CMA (Competition and Markets Authority) have been looking into the deal.
Now the UK’s CMA has released a report and it is saying that the deal between the two companies would not be good for gamers. According to the CMA, the deal could lead to higher prices, fewer choices, and less innovation.
The CMA provisionally found that being able to offer popular games will be important for cloud gaming providers to attract users as the market continues to grow and develop. The evidence available to the CMA currently indicates that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service (or only available on other services under materially worse conditions). Microsoft already accounts for an estimated 60-70% of global cloud gaming services and also has other important strengths in cloud gaming from owning Xbox, the leading PC operating system (Windows) and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming).
The CMA provisionally found that buying one of the world’s most important game publishers would reinforce this strong position and substantially reduce the competition that Microsoft would otherwise face in the cloud gaming market in the UK. This could alter the future of gaming, potentially harming UK gamers, particularly those who cannot afford or do not want to buy an expensive gaming console or gaming PC.
The CMA has now sent details to Microsoft and Activision on how they think the issues could be resolved so that the deal could go ahead. It will be interesting to see what happens.
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