UK Regulator Blocks Microsoft's $70 Billion Activision Blizzard Acquisition

[MacRumors]

The U.K.'s antitrust regulator has announced it will block Microsoft's purchase of Activision Blizzard over concerns the deal would be anticompetitive in the cloud gaming market.

In a press release announcing the block, the Competition and Markets Authority (CMA) said it had prevented Microsoft's proposed purchase of Activision over concerns the deal would lead to "reduced innovation and less choice for U.K. gamers over the years to come."

The CMA carefully considered whether the benefit of having Activision's content available on Game Pass outweighed the harm that the merger would cause to competition in cloud gaming in the U.K. The CMA found that this new payment option, while beneficial to some customers, would not outweigh the overall harm to competition (and, ultimately, U.K. gamers) arising from this merger, particularly given the incentive for Microsoft to increase the cost of a Game Pass subscription post-merger to reflect the addition of Activision's valuable games.

Microsoft entered into a $68.7 billion deal to buy Activision Blizzard, one of the most popular video games publishers in the world, in January 2022. The studio is the maker of hit games such as Call of Duty, Candy Crush, World of Warcraft, and more.

If the purchase for Microsoft had been allowed to go ahead it would have seen several of Activision's games move to Xbox Game Pass, Microsoft's gaming subscription service.

Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming and this deal would strengthen that advantage giving it the ability to undermine new and innovative competitors," said Martin Coleman, chair of the independent panel of experts who conducted the investigation.

Microsoft engaged constructively with us to try to address these issues and we are grateful for that, but their proposals were not effective to remedy our concerns and would have replaced competition with ineffective regulation in a new and dynamic market.

Cloud gaming needs a free, competitive market to drive innovation and choice. That is best achieved by allowing the current competitive dynamics in cloud gaming to continue to do their job.

Microsoft's acquisition of Activision Blizzard was approved by regulators in several other countries including Brazil, Chile, Japan, Saudi Arabia, Serbia, and South Africa, but the company still needs the approval of the U.K.'s CMA and the European Union to complete the deal.

The EU Commission has until late May to announce its decision. Microsoft has already said that the company will appeal the CMA's decision. If it fails, Microsoft will owe Activision $3 billion in break-up fees.

Separately in the United States, Microsoft is facing additional regulatory blowback from the Federal Trade Commission (FTC), which sued to block Microsoft's Activision Blizzard purchase last year. The investigation is still ongoing.

Microsoft's Xbox Game Pass is available on the iPhone and iPad through Safari, but not the App Store. While Apple does allow all-in-one gaming subscription services to be on the platform, every game offered on the service must be submitted individually for approval through the ‌App Store‌ review process.

Article Link: UK Regulator Blocks Microsoft's $70 Billion Activision Blizzard Acquisition

 

[senttoschool]

F yes.

Great for gaming industry.

Otherwise, it'd become an arms race to buy up all the studios.

 

[Andres Cantu]

Microsoft, how about trying to match Sony’s momentum with the PS5 and their exclusives on your own instead of trying to buy your way into it?

 

[goobot]

Microsoft, how about trying to match Sony’s momentum with the PS5 and their exclusives on your own instead of trying to buy your way into it?

Pretty sure Sony bought all those studios at some point

 

[headlessmike]

Pretty sure Sony bought all those studios at some point

Most were certainly acquired. https://en.wikipedia.org/wiki/PlayStation_Studios#Studios

 

[TheRealNick]

Microsoft, how about trying to match Sony’s momentum with the PS5 and their exclusives on your own instead of trying to buy your way into it?

Uh that is basically what Sony did, they just did it over a longer period with smaller studios.

 

[CJM]

Not sure how I feel about this decision.. Morally I'm against massive tech corps owning whole swathes of the market, but then on the other hand, Microsoft are being really smart with their products and how they're handling cloud gaming these last few years.
Coupled with my belief that Activision is run by idiot suits, determined to ruin their brands with greed whereas Microsoft of today is much better equipped to foster creativity in those brands.
But then again, I really don't want Kotick to get his golden parachute.

 

[oofio2461]

In your face, Monopoly Microsoft!

 

[TechnoMonk]

Now this is a move I can get behind. Microsoft could have used the leverage to restrict quality games on other platforms. Google should have never been allowed to buy doubleclick and YouTube. Let independent studios develop for platforms of their choice.

 

[Realityck]

Microsoft's acquisition of Activision Blizzard was approved by regulators in several other countries including Brazil, Chile, Japan, Saudi Arabia, Serbia, and South Africa, but the company still needs the approval of the U.K.'s CMA and the European Union to complete the deal.

The EU Commission has until late May to announce its decision. Microsoft has already said that the company will appeal the CMA's decision. If it fails, Microsoft will owe Activision $3 billion in break-up fees.

Even though they ran into this, the acquisition still might happen because of how many other countries have already approved it. If that wasn’t the current situation then yeah I would say it’s the end of this. It might just be that CMA needs agreement restrictions to be in place before they can accept this.

 

[RammyXX]

Good. The eight studios Microsoft acquired at once when they bought ZeniMax Media for $7.5 billion is damaging enough to the industry and consumers.

 

[TechnoMonk]

Now this is a move I can get behind. Microsoft could have used the leverage to restrict quality games on other platforms. Google should have never been allowed to buy double click and YouTube.

Most were certainly acquired. https://en.wikipedia.org/wiki/PlayStation_Studios#Studios

Not as big as Activision. Imagine MS making COD and WoW exclusive to Xbox.

 

[aeternitas]

Pretty sure Sony bought all those studios at some point

MS isn’t trying to buy a studio, it’s trying to buy a whole publisher.

 

[tim6181]

There's a huge difference between buying small studios, who subsequently go onto make very successful games, most of which were brand new IP than going out and buying a huge studio with existing massive IP.

 

[Bokito]

Good news for people playing Blizzard games on a Mac. Although not all recent titles made it to the Mac I think Microsoft would've axed WoW and Hearthstone for the Mac at some point.

 

[bluecoast]

Not a big MS fan (nor of how big tech behaves in general, including increasingly, Apple) - and I'm British - but this doesn't seem to make sense.

The way that the industry is going is produce games with full path tracing lighting etc. and that will need to be done locally (unless you have insanely fast cloud servers and fast low latency internet - which is a small market right now).

But yeah, for casual gaming, cloud gaming is going to be big.

However, last I looked, Sony had a lot of money and could ramp up cloud gaming using Google Cloud and/or AWS.

If they choose to cling to their business model that worked for them c 2000, that's up to them.

But I think it's wrong that they're using lobbyists to persuade regulators to keep the gaming market in a way that suits them.

 

[JCCL]

Microsoft, how about trying to match Sony’s momentum with the PS5 and their exclusives on your own instead of trying to buy your way into it?

Instead of Sony paying others like square to keep Final Fantasy exclusive, or even the Street Fighter demo?

 

[jimbobb24]

Uh that is basically what Sony did, they just did it over a longer period with smaller studios.

Much much smaller

 

[bluecoast]

Good news for people playing Blizzard games on a Mac. Although not all recent titles made it to the Mac I think Microsoft would've axed WoW and Hearthstone for the Mac at some point.

Not necessarily. MS owned ZeniMax's The Elder Scrolls Online is still playable on the Mac.

Admittedly there are no plans to bring it to Mx Macs.

However, this is more because the TESO architecture belongs to the 00s and they say (believably) that it's just too difficult to bring this to Mx Macs. I mean it's creaky enough on Windows.

Whereas WoW has constantly updated their engine to work on the Mac and so as long as it's economically viable, I don't think that this would stop any time soon.

 

[jimbobb24]

I don’t know if consoles will make it another generation. If apple breaks down and lets Microsoft and Sony stream then I just need streaming subscriptions and some device that will run it like an Apple TV or other. Streaming has its problems - but that seems to be the direction things are headed

 

[Marshall73]

There will be some horse trading but this deal will go through later this year. Expect concessions on cloud gaming as that seems to be the only sticking point.

 

[Spaceboi Scaphandre]

F yes.

Great for gaming industry.

Otherwise, it'd become an arms race to buy up all the studios.

You do know it's not over right? They're appealing the decision and they can easily overturn it with concessions. A lot of deals the CMA blocked were overturned in the appeals. Plus if the EU signs off on it, Microsoft and ABK can still close even if the UK blocks it

Microsoft, how about trying to match Sony’s momentum with the PS5 and their exclusives on your own instead of trying to buy your way into it?

He says as Sony pays third party publishers to skip Xbox and delay PC releases

In your face, Monopoly Microsoft!

Yes the platform in last place is a monopoly.

Not sure how I feel about this decision.. Morally I'm against massive tech corps owning whole swathes of the market, but then on the other hand, Microsoft are being really smart with their products and how they're handling cloud gaming these last few years.
Coupled with my belief that Activision is run by idiot suits, determined to ruin their brands with greed whereas Microsoft of today is much better equipped to foster creativity in those brands.
But then again, I really don't want Kotick to get his golden parachute.

Kotick's parachute would happen even if the deal didn't close. He's that much of a greasestain. At least under Microsoft ABK's employees could unionize, and I'd have Blizzard games on Steam FINALLY killing that god awful BattleNet launcher.

Good. The eight studios Microsoft acquired at once when they bought ZeniMax Media for $7.5 billion is damaging enough to the industry and consumers.

How? After Microsoft bought Bethesda we got the entire Bethesda+Zenimax catalog on Game Pass, great games like Hi Fi Rush, and Bethesda's teams are happier since they have more resources to work with. It's been a net positive for everyone...except Playstation. Hmm. 🤔

Good news for people playing Blizzard games on a Mac. Although not all recent titles made it to the Mac I think Microsoft would've axed WoW and Hearthstone for the Mac at some point.

That makes zero sense. Microsoft and Apple have a good working relationship with macOS software. Microsoft owns Mojang, yet Minecraft is still on Mac, and it even got updated to be native to Apple Silicon. The iOS version of Minecraft has crossplay with PC and console. Microsoft even actively pushes Apple to let them put Xbox Cloud on iOS.

So Microsoft buying ABK wouldn't change your Blizzard games on Mac, especially since these games have a large Mac userbase. They would be fools to abandon them.

 

[decimortis]

I'm sure this will still go through once Microsoft greases the right palms. If anyone thinks these blocks are to "protect the gamers" they're naïve to the situation.

 

[Realityck]

Good news for people playing Blizzard games on a Mac. Although not all recent titles made it to the Mac I think Microsoft would've axed WoW and Hearthstone for the Mac at some point.

Possibly but this might have allowed more emphasis on futire ports rather the current trend of mostly PC and both consoles. Also remember Activision’s reputation damage of recently in California. So as being discussed there are a lot of bargaining chips on the tables. The real question is does this harm game creation or help it?

 

[rpmurray]

The CMA carefully considered whether the benefit of having Activision's content available on Game Pass outweighed the harm that the merger would cause to competition in cloud gaming in the U.K. The CMA found that this new payment option, while beneficial to some customers, would not outweigh the overall harm to competition (and, ultimately, U.K. gamers) arising from this merger, particularly given the incentive for Microsoft to increase the cost of a Game Pass subscription post-merger to reflect the addition of Activision's valuable games.

I'm shocked, shocked that anyone would accuse Microsoft of such shenanigans.