CMA Blocks Microsoft’s $69 Billion Takeover of Activision Blizzard Citing Concerns Over Cloud Gaming Market Alteration
The UK’s Competition and Markets Authority (CMA) has blocked Microsoft’s proposed $69 billion takeover of Activision Blizzard, citing concerns that the deal would “alter the future of the fast-growing cloud gaming market” and stifle innovation and choice for consumers. The CMA's main concern regarding the acquisition was the potential suppression of the cloud gaming industry. This decision will be appealed by Microsoft. The CMA seems to be treating cloud gaming like an extension of the console wars, with one platform’s market share coming at the expense of another’s. The focus appears to be shifting away from the technical aspects of cloud gaming, such as software and server racks. Instead, the emphasis is on subscriptions like Game Pass that can dominate the market through sheer force by attracting a large enough user base to outcompete rival services. According to the regulator, Microsoft dominates 60-70% of the entire cloud gaming industry. With its possession of Windows, Game Pass, and Azure, Microsoft currently controls up to 70% of the cloud gaming industry. The concern is that adding Activision Blizzard's popular franchises to this dominant position could potentially create anti-competitive practices in the future. The decision made by CMA will be appealed by both Microsoft and Activision.
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