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

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.

microsoft purchases Activision
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.

Top Rated Comments

goobot Avatar
14 months ago

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
Score: 37 Votes (Like | Disagree)
TheRealNick Avatar
14 months ago

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.
Score: 20 Votes (Like | Disagree)
senttoschool Avatar
14 months ago
F yes.

Great for gaming industry.

Otherwise, it'd become an arms race to buy up all the studios.
Score: 17 Votes (Like | Disagree)
headlessmike Avatar
14 months ago

Pretty sure Sony bought all those studios at some point
Most were certainly acquired.
Score: 12 Votes (Like | Disagree)
tim6181 Avatar
14 months ago
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.
Score: 12 Votes (Like | Disagree)
CJM Avatar
14 months ago
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.
Score: 10 Votes (Like | Disagree)

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