This article was last updated on April 26, 2023
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Concerns About Cloud Gaming Market
The largest gaming industry acquisition that could have been a game-changer has been stopped by the British competition watchdog. The decision was announced after the United States regulator filed a lawsuit in Federal court to block the acquisition. Microsoft, who had plans to acquire Activision Blizzard for 60 billion euros, suffered another blow when the British competition regulator, the CMA, rejected the deal. According to the investigation, the CMA is highly concerned about the competition in the cloud gaming industry.
A Powerful Position
The CMA expressed concerns that the acquisition could harm the growth of competition and the innovation of innovative competitors in the future. Microsoft already holds a substantial market share of 60 to 70 percent in the global cloud gaming market. According to experts, this acquisition would only strengthen the lead of Microsoft, which would give them an unfair level of influence over the market.
Worries not taken away
Microsoft’s proposal to address the concerns of the regulator was not considered to be feasible. The CMA said that the proposal had several shortcomings, stating that accepting Microsoft’s solutions would mean that the CMA had to oversee this, whilst a rejection would mean that the cloud gaming market could continue to develop without intervention.
Microsoft President Brad Smith stated that the decision reflects a lack of understanding of the market and cloud technology works. Although disappointed with the decision, Activision Blizzard says it will work hard with Microsoft to overturn the decision in an appeal procedure. In addition to UK and US regulatory authorities, the proposed acquisition is also awaiting approval from the EU authorities, who are expected to give their verdict next month.
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