The hut at Microsoft is probably on fire right now: the Activision deal is being blocked in the UK.
This is not going at all as planned for Microsoft. In Great Britain it has now been announced that the $69 billion deal to acquire Activision blocked. According to the CMA (Competition and Markets Authority), the reason for this is cloud gaming, which Microsoft dominates.
Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that it would be commercially advantageous for Microsoft to make Activision’s games exclusive to its own cloud gaming service.
Microsoft is already for Responsible for 60-70 percent of global cloud gaming servicesit goes on to say. With Xbox, Windows and Azure as well as Xbox Cloud Gaming, the company would already be positioned with important sizes. With games like Call of Duty, Overwatch, and World of Warcraft, Microsoft’s advantage in the market would increase even further.
This is how Microsoft and Activision are reacting
Microsoft’s President Brad Smith isn’t giving up on the deal just yet, nor is Activision CEO Bobby Kotick. The latter reported according to Reuters at his employees with the words That’s not the news we wanted – but the final word on this deal is far from over.
The two companies want challenge and appeal the decision of the CMA.
Hard setback for the deal
The billion-dollar deal has not yet completely failedbut the blocking doesn’t bode too well. According to an industry analyst, the appointment is to Piers Harding Rolls be processed by the CMA within nine months, so a final judgment could still be delayed.
In addition, the US authority, like the EU, has not yet made a decision on the deal. As one of the most important markets, the blocking of Great Britain is a big damper for Microsoft and Activision.
Are you surprised by how the mega deal went? Do you think the CMA’s reasoning that Microsoft has too much advantage in cloud gaming is tenable? And do you hope that the deal will still be successful in the end or should Activision remain separate from Microsoft? Feel free to write your opinion in the comments, we are curious!
