UK Government Blocks Xbox’s Acquisition of Activision Blizzard Over Cloud Gaming Concerns

The UK government’s Competition and Markets Authority (CMA) has blocked Microsoft’s $69bn acquisition of Activision Blizzard, citing concerns over the implications for cloud gaming. The CMA argued that the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and fewer choices for UK gamers. It also said that Microsoft’s proposals to remedy these concerns were not effective and would have replaced competition with ineffective regulation.

The CMA found that Microsoft had failed to provide a solution to its concerns over the deal’s impact on the cloud gaming market. It deemed that Xbox making Activision Blizzard games like Call of Duty exclusive to its consoles would not make sense, but it didn’t reach the same decision about cloud gaming. The CMA believed that, if the deal was approved, there would be a significant risk of disagreement between Microsoft and other cloud gaming service providers.

Microsoft has said it will appeal the decision, arguing that the CMA’s decision appears to reflect a flawed understanding of the market and the way the relevant cloud technology works. Brad Smith, vice chair and president of Microsoft, said the decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom.

Cloud gaming is growing fast with the potential to change gaming by altering the way games are played, freeing people from the need to rely on expensive consoles and gaming PCs, and giving them more choice over how and where they play games. The CMA emphasized that 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.

Source: IGN, Gov.UK

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