Here’s why the acquisition was blocked and how Microsoft is responding.
However, the acquisition plans were first met with resistance from the Federal Trade Commission (FTC) due to the acquisition’s potential to harm competition in the space and prevent users who use rival consoles from having access to the games.
On Wednesday, Microsoft faced similar concerns from the U.K.’s Competition and Markets Authority (CMA), which blocked the deal from happening in the U.K..
The CMA claims that the deal would hurt the cloud gaming market making Microsoft “even stronger in cloud gaming, stifling competition in this growing market.” The CMA calculates that Microsoft already accounts for 60-70% of global cloud gaming services.
The CMA’s in-depth review of the deal began in Sept. 2022, and reached its conclusion nearly five months later on Feb. 22, 2023.
In the absence of the Microsoft acquisition, the CMA says that Activision would likely start offering its games via cloud platforms, which would give U.K. gamers more flexibility on how to play, with the option to play without expensive gaming consoles and PCs.
However, the CMA found that Microsoft would greatly benefit from making Activision’s games exclusive to its own platform, and as a result, stifle potential innovation developments that could be benefit the public from occurring.
