This morning, the United Kingdom’s Competition and Markets Authority (“CMA”) posted its decision on the Microsoft ATVI merger, blocking the deal to “protect innovation and choice cloud gaming.” The CMA believes that Microsoft’s solutions and offerings have significant shortcomings and that the authority was concerned about the effects it could have on the cloud gaming market as a whole.
Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service.
Microsoft already accounts for an estimated 60-70% of global cloud gaming services and 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 deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft. The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future.
GOV.UK
In a statement to The Verge, Microsoft President Brad Smith has said that the company is fully committed to the acquisition and will appeal in the proper courts. He has also gone on Twitter to express the position as well.
As of this writing, the European Commission has yet to make their final decision on the matter. The United States Federal Trade Commission also scrutinising the company’s attempted merger with ATVI. A hearing for that is scheduled later this year.
