Microsoft Blizzard Acquisition Opposed By UK Over Exclusivity Concerns
Gamers have been buzzing about the controversial Microsoft acquisition of Activision Blizzard, but it’s taken quite a long time since it was first announced in January of 2022. The latest roadblock happened overseas in the UK.
The Competition and Markets Authority is the most recent organization to question the $69 billion acquisition. The final report stated that “the only effective remedy” to the deal possibly stifling competition and creating unfair advantages is to “prohibit the merger.”
In response, Microsoft and Activision Blizzard have announced that they will appeal the decision.
Why is the UK Blocking the Microsoft Blizzard Merger?
From the jump, the merger was opposed by Microsoft’s rival Sony. Throughout North America and Europe, gamers, brands, and organizations were concerned with Microsoft purchasing the game developer for fear it would give Microsoft control of franchises like Call of Duty and Candy Crush.
Recently, Microsoft bought Bethesda, the publisher behind The Elder Scrolls and the upcoming Redfall game. Controversy erupted when the game’s Creative Director, Harvey Smith, claimed that Microsoft shelved plans for a PlayStation 5 version of the game after buying Bethesda. This raised alarms for Sony, who noted that it expected the company to do the same thing if they acquired Blizzard.
In response, Microsoft and Blizzard both swore that they would continue exclusivity deals with Sony and Nintendo Switch, as well as not make games exclusive for the Xbox (for the time being at least).
But now, the Competition and Markets Authority is worried that the deal would impact cloud gaming, which allows people to stream games to tablets and phones. Cloud gaming gives players more choice when it comes to how and where they play.
“This means that it is vital that we protect competition in this emerging and exciting market,” said Competition and Market Authority’s Chair Martin Colman.
Microsoft currently has a strong lead in the cloud gaming department. No longer tethered to an Xbox console, gamers can also play games they purchased on televisions and other devices that have the Xbox Cloud Gaming service. The UK watchdog organization felt this acquisition would further reinforce Microsoft’s advantage in this space by controlling key game titles like Call of Duty, World of Warcraft, and Overwatch.
The ruling and its reasoning has not deterred Microsoft nor Activision Blizzard. President Brad Smith said that Microsoft will remain “fully committed” to the acquisition. According to Smith, the decision “rejects a pragmatic path to address competition concerns” and it should expect to be appealed.
"We're especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works," Smith said.
Meanwhile, Activision was also disappointed in the news, stating that it would be working alongside Microsoft “aggressively” in an attempt to reverse the decision.
The watchdog said Wednesday that it reviewed Microsoft's proposals to ease competition concerns "in considerable depth" but found those solutions would require its oversight, whereas preventing the merger would allow cloud gaming to develop without intervention.
Microsoft already has a strong position in the cloud computing market and regulators concluded that if the deal went through, it would reinforce the company's advantage by giving it control of key game titles.
