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Microsoft's $68.7b acquisition of Activision Blizzard blocked by UK regulator

26 Apr 2023 | Rasmus Larsen |

Microsoft's $68.7b acquisition of Activision Blizzard – its largest acquisition to date – has been blocked by the UK regulator while investigations are ongoing in the EU and USA.

In January 2022, Microsoft announced plans to acquire Activision Blizzard, the maker of Call of Duty, World of Warcraft, Candy Crush, Tony Hawk, Diablo, Overwatch, Spyro, Hearthstone, Guitar Hero, Crash Bandicoot, StarCraft, and more popular PC, console and mobile games.

Microsoft's plan was to use the Activision Blizzard games to boost its Xbox Game Pass subscription service through cloud gaming via apps (such as the Xbox app on Samsung TVs) as well as the Xbox ecosystem as a whole.

Cloud gaming, or game streaming, allows Microsoft to get PC and console games onto Smart TVs, streaming media boxes and other devices that are not powerful enough to run the games in local hardware. Only an internet connection and a game controller is required. So far, the Xbox app is TV-exclusive to Samsung Smart TVs. Apple has effectively blocked game streaming on Apple TV, iPhone etc.

Xbox Activision Blizzard

Microsoft had hoped to get these games and more under its wings but the acquisition is facing roadblocks

Less innovation and choice for gamers

After a lengthy process, UK regulator CMA has today blocked the acquisition over concerns that it will lead "to reduced innovation and less choice for UK gamers over the years to come". - "The CMA carefully considered whether the benefit of having Activision's content available on Game Pass outweighed the harm that the merger would cause to competition in cloud gaming in the U.K. The CMA found that this new payment option, while beneficial to some customers, would not outweigh the overall harm to competition (and, ultimately, U.K. gamers) arising from this merger, particularly given the incentive for Microsoft to increase the cost of a Game Pass subscription post-merger to reflect the addition of Activision's valuable games," said the UK's Competition and Markets Authority (CMA) in a press release. Microsoft had tried to appease regulators by signing deals with Nintendo, Boosteroid, Ubitus and Nvidia to let Xbox PC games run on competing gaming services for at least 10 years. Microsoft has tried and failed to sign a similar deal with Sony PlayStation. Microsoft said that it will appeal the decision in the UK. The deal had already been approved in countries such as Brazil and Japan. Investigations are ongoing in the EU and USA. The EU will announce its decision by the end of May. - "Cloud gaming needs a free, competitive market to drive innovation and choice. That is best achieved by allowing the current competitive dynamics in cloud gaming to continue to do their job," said Martin Coleman, chair of the independent panel of experts conducting the UK investigation.

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