Competition and Markets Authority Closes Public Consultation on Microsoft’s Bid to Acquire Activision Blizzard
The Competition and Markets Authority (CMA) has concluded its public consultation on Microsoft’s proposed acquisition of Activision Blizzard, signaling that a final decision is on the horizon. The CMA will now review the comments submitted by the public over the past week, as well as Microsoft’s amended proposal, to determine whether to reverse its initial decision to block the merger.
Microsoft first announced its plans to acquire the gaming studio, which is responsible for popular titles such as Call of Duty and World of Warcraft, in January of last year. However, the merger has faced significant challenges, with regulators worldwide expressing concerns about the potential consolidation of power in the gaming market and the impact on consumer choice.
In an effort to address these concerns, Microsoft has entered into 10-year agreements with Sony and Nintendo to ensure that Call of Duty remains available on PlayStation and Nintendo consoles. Additionally, Microsoft has committed to making all Activision Blizzard games accessible on other cloud gaming platforms for the next decade.
Despite these efforts, the CMA remains apprehensive about the merger’s potential impact on the rapidly growing cloud gaming market. Cloud gaming refers to the streaming of games rather than downloading them onto a device before playing.
George Osborn, director of policy communications at Taso Advisory, believes that the CMA is striving to establish a robust regulatory environment for the tech industry in the UK. He suggests that the regulator’s decision reflects its commitment to positioning the UK as a tech superpower.
Microsoft has been actively working to address the CMA’s concerns and restructure the $69 billion deal. The company recently received approval for the acquisition in the United States, following a ruling by a US judge. The deal has also been approved in the European Union and China. However, securing approval in the UK remains a significant milestone for Microsoft.
The UK gaming industry is larger than the music industry and accounts for nearly half of all revenue generated by the entertainment sector, according to figures published by the Entertainment Retailers Association in 2022. Microsoft’s interest in acquiring Activision Blizzard is driven, in part, by the lucrative mobile phone game Candy Crush.
A spokesperson for the CMA reiterated the regulator’s stance, stating that their decision to block the deal due to concerns in the cloud gaming market remains unchanged. However, the spokesperson also noted that if Microsoft were to address the CMA’s concerns through restructuring or present evidence of material changes since the initial decision, the regulator would be legally obligated to consider the new information.
The CMA is expected to announce its decision on Microsoft’s submissions by August 29th.
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