Microsoft's acquisition of Activision Blizzard (Act. Blizz.) has been blocked in the UK by the Competition and Markets Authority (CMA). This is due to concerns over cloud gaming issues related to the deal. Let us now take a look at the reasons behind the decision and its potential impact on the gaming industry.
The CMA's decision
The CMA's decision to block the deal came after months of analyzing millions of documents and emails from the public. The CMA concluded that the deal could "alter the competitive landscape" and that Microsoft's proposed solution failed to effectively address the concerns in the cloud gaming market.
The CMA has concerns that Microsoft would find it commercially beneficial to make Act. Blizz's. games exclusive to its own cloud gaming service, which would reinforce Microsoft's advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft. The CMA also stated that Microsoft's proposals would have replaced competition with ineffective regulation in a new and dynamic market.
Impact on the gaming industry
The decision to block the deal has huge implications for the gaming industry. The deal would have given Microsoft control over some of the most popular gaming franchises in the world. This includes the likes of Call of Duty, Overwatch, and Candy Crush.
The deal would have also given Microsoft a huge edge in the cloud gaming market, which is expected to grow rapidly in the coming years. The decision to block the deal is a blow to Microsoft's gaming ambitions. Microsoft has been investing heavily in the gaming industry in recent years. It bought Bethesda in 2020 and launched its cloud gaming service, Xbox Game Pass, in 2017. The deal of Act. Blizz. would have been a major step forward for Microsoft in its efforts to become a dominant player in the gaming industry.
The decision to block the deal is also a warning to other tech firms looking to buy gaming firms. The CMA's decision sends a message that it will not allow brands to gain too much control over the gaming industry, especially in the nascent cloud gaming market. The decision could also lead to increased scrutiny of other gaming acquisitions in the future.
Final Words
The CMA's decision to block Microsoft's acquisition of Act. Blizz. is a huge blow to Microsoft's gaming ambitions and has huge implications for the gaming industry as a whole. The decision sends a message that the CMA will not allow companies to gain too much control over the gaming industry, especially in the nascent cloud gaming market. It remains to be seen what impact this decision will have on Microsoft's future gaming strategy and whether it will lead to increased scrutiny of other gaming acquisitions in the future.
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