...By Jack Sylva for TDPel Media.
The UK competition watchdog has blocked Microsoft’s 68.7 billion dollar takeover of gaming firm Activision Blizzard over concerns in the cloud gaming sector.
The Competition and Markets Authority (CMA) prevented the deal from going ahead.
Microsoft had struck a deal to buy the maker of Candy Crush and Call of Duty in January 2022.
CMA’s Concerns and Decision
The CMA’s independent panel of experts, led by Martin Coleman, expressed concerns that the takeover would have strengthened Microsoft’s already powerful position and given it an unfair advantage over competitors in cloud gaming.
The deal would have undermined new and innovative competitors, making it difficult for them to establish a foothold in the market.
Proposals from Microsoft
Microsoft engaged constructively with the CMA to address these issues, but the company’s proposals were not effective in remedying the watchdog’s concerns.
The proposals would have replaced competition with ineffective regulation in a new and dynamic market.
Implications of the Decision
The decision by the CMA to block the takeover will have significant implications for both Microsoft and Activision Blizzard.
The move is a blow to Microsoft’s plans to expand its gaming portfolio and strengthen its position in the cloud gaming sector.
Meanwhile, Activision Blizzard will have to consider other options to secure its future growth and competitiveness.
The CMA’s decision highlights the importance of competition in the gaming industry and the need to prevent dominant players from gaining an unfair advantage.
The watchdog’s actions have protected the interests of consumers and ensured that the market remains open to new and innovative competitors.