2023-04-27 10:10:51
UK regulator CMA believes the takeover would give Microsoft too much power in the cloud gaming market.
According to UK regulator Competition and Markets Authority (CMA), Microsoft has between 60 and 70 percent of the cloud gaming market in Britain. If Activision Blizzard games were added exclusively, there would be too little choice left for consumers. Microsoft declares to appeal this judgment.
The tech giant had already reached an agreement in January last year to buy game publisher Activision Blizzard for 60 billion euros. Activision Blizzard is known for games like Call of Duty, Overwatch, and World of Warcraft. The transaction would also be one of the largest buyouts in the gaming industry. Activision Blizzard’s games might thus be added to Xbox consoles and Microsoft’s Xbox Game Pass and PC Game Pass streaming services.
Console versus cloud
This deal immediately drew a lot of criticism, especially from competitor Sony, the publisher of the rival game console PlayStation. In March, the regulator CMA reacts to the objections. According to him, the Xbox does not occupy too strong a position in the console market. But it is different for games in the cloud, according to the regulator. This is indeed a brand new and rapidly growing market, meaning that gamers ‘don’t have to buy expensive consoles’ and have more flexibility to choose how they want to play. In this market, it would therefore be important not to give too much power to a single player.
The takeover was not only scrutinized by the UK regulator, but also by European and US regulators, who had previously expressed concerns regarding a possible monopoly. To convince them, Microsoft has also entered into agreements with various publishers, such as Nintendo and Nvidia, to offer Activision Blizzard games on their platforms over the next decade. But Microsoft has, according to the CMA, taken too little account of platforms that offer subscriptions to run more games. Similarly, companies that want to offer games on computers not running on Windows, such as those of Apple and those integrating the Linux system, would be forgotten.
Microsoft reacts in an annoyed way. “This decision rejects the pragmatic solutions of objection and proves harmful for technological innovation and investments in Great Britain”, declares its president Brad Smith, who announces that the company will appeal.
The US authorities are currently trying to oppose the takeover of Activision Blizzard by Microsoft. The judgment of the investigation carried out by the European Commission is expected during the spring.
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