Oliver Cragg / Android Authority
TL;DR
- The UK’s competition watchdog has blocked Microsoft’s bid to buy Activision Blizzard.
- The regulator largely cited concerns about the cloud gaming sector.
- Activision Blizzard has confirmed that it plans to appeal the decision.
Microsoft announced a $68 billion deal to buy Activision Blizzard in January 2022. The acquisition was subject to regulatory approval, and now the UK’s competition watchdog has blocked the move.
The UK’s Competition and Markets Authority (CMA) announced its decision to block the deal today (April 26). It cited concerns that “the deal would alter the future of the fast-growing cloud gaming market.”
Microsoft proposed to address the CMA’s concerns over the deal, but the watchdog cited several “significant” shortcomings with the proposal. These included concerns that Microsoft’s proposal didn’t adequately cover different cloud gaming business models (such as “multigame subscription services”). It also noted that the proposal didn’t accommodate desktop platforms other than Windows. The CMA also cited the standardization of terms and conditions for various games under the merger as a key concern.
In saying so, the CMA added that it didn’t expect the deal to significantly reduce competition in the UK console gaming space.
“Microsoft engaged constructively with us to try to address these issues and we are grateful for that, but their proposals were not effective to remedy our concerns and would have replaced competition with ineffective regulation in a new and dynamic market,” said Martin Coleman, the chair of the panel behind the investigation.
Microsoft and Activision Blizzard: What next?
Oliver Cragg / Android Authority
Activision Blizzard confirmed in an email to employees that it would lodge an appeal against the decision with the UK Competition Appeals Tribunal. So the two parties haven’t exhausted all their options just yet.
In any event, this is bad news if you were hoping to stream Call of Duty or Overwatch 2 to your phone via an Xbox Game Pass Ultimate subscription. A failed appeal means you’ll either need to buy these games on an existing platform you own, or you’ll need to buy a new console or PC first.
Do you think the Xbox/Activision deal should be blocked?
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Needless to say, a failed deal would also mean you shouldn’t expect new Activision Blizzard games to be available on Xbox Game Pass from day one.
Microsoft also signed a deal with NVIDIA earlier this year that would bring all Xbox-published games on PC to the Geforce Now streaming service if the Activision Blizzard acquisition was completed. It now stands to reason that this deal won’t apply in the event that Microsoft and Activision Blizzard’s UK appeal isn’t successful.
