The seemingly endless saga of the Microsoft-Activision buyout continues, with a new update from the United Kingdom. The country's Competition and Markets Authority (CMA) has prevented Microsoft's acquisition of Activision Blizzard, over concerns of the buyout resulting in competition problems. While the CMA did side with Microsoft last month, that was on the grounds of competition in console gaming--this time around, the decision was made after considering the cloud gaming market, which it believed the merger would "damage competition [...] leading to less innovation and choice" by having all of Activision's library available on Xbox Game Pass.

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 UK. The CMA found that this new payment option, while beneficial to some customers, would not outweigh the overall harm to competition (and, ultimately, UK 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.

Directly following the CMA's decision, stocks of Activision Blizzard fell as much as 8%. Microsoft stated that they would be appealing the decision, however, the deal would still need to be passed by similar regulators in the US and EU, which it is currently struggling to do so, regardless of the decision made by the UK, though it has been initially approved by Japan, Brazil, and South Africa. Should acquisition be impossible, or talks break down completely, Microsoft will owe Activision a whopping $3 billion, as a result of having to terminate the merger contract.

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.

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.

Source

 

[Muskusrat]

Sorta ridiculous, but realistically can they really stop a company from merging for just one region?

What would they do if it went ahead anyway - big fine? Bar further business transactions?

God you really sound like an American. Like America doesn’t do the exact same thing when it suits them or way worse stuff then just stop a merger. But what Microsoft can do is to simply stop publishing games in the UK. It will be a matter of how much money it will costs them if they will do that. Or they can properly go to court.

 

[Xzi]

Right, but eventually they want to sell themselves somehow or do you think Activation can survive on its own?

Financially they're probably doing just fine when stupid stuff like Diablo Immortal is raking in so much cash and CoD takes so little effort, it's only their reputation (among gamers and employees) that's quickly being tanked. So it's hard to say how long they can stand on their own, though it's clear they're actively seeking a buyout, probably for the purpose of beating the clock on their inevitable market drop.

 

[Delerious]

Realistically speaking, cloud gaming doesn't even make up 1% of the overall gaming landscape (at current). If MS want the merger to go through in the UK, all they'd have to do is not offer ActiBlizz games on xCloud in the UK, and just let other cloud services host them. It's not like they'd be losing too much in that situation - at least not in the short term. As the landscape changes, they can proceed to renegotiate with the CMA.

The big issue for Microsoft is probably going to come from the FTC and the ECT, who can cite the same reason for not allowing the merger to go through.

Anyway, I lack the ability to care either way. Neither of these companies have the same kind of substance they used to have in the gaming landscape.

 

[pustal]

So like can every country in the world that these companies operate in try to put a stop on their merger?

At what point are they infringing on US sovereignty by impeding the merger of two US companies

The UK cannot block a foreign merger. They can block a merger that has UK assets, that I believe to be the case or can block the company from doing business in the country.

A far cry from infringing on US sovereignty. That's the actual US modus operandi, that is a bit trigger happy in performing coup d’état. Your government killed on of our democratic elect prime ministers, as an example. So glass houses and stones, etc.

 

[The Catboy]

Honestly, this entire merger was just started to distract people from the constant legal issues surrounding Activision-Blizzard. Just like when they release a new character for OW2

 

[Jayro]

I hope this acquisition goes bad, ms has too much and screw actiblizz.

This. My feeling exactly. M$ owns too much already.

 

[pustal]

Honestly, this entire merger was just started to distract people from the constant legal issues surrounding Activision-Blizzard. Just like when they release a new character for OW2

The Blizzard legal issues has consequences for their workers. This merger have consequences for every gaming consumer. It's not a distraction. Not wanting to take the importance of Blizzard workers to get their justice, this at a whole other scale.

 

[Jayro]

Honestly, this entire merger was just started to distract people from the constant legal issues surrounding Activision-Blizzard. Just like when they release a new character for OW2

Business as usual for them, amirite?

 

[The Catboy]

The Blizzard legal issues has consequences for their workers. This merger have consequences for every gaming consumer. It's not a distraction. Not wanting to take the importance of Blizzard workers to get their justice, this at a whole other scale.

Bobby is literally being sued for rushing into merger to avoid liability and create confusion
https://www.protocol.com/amp/bobby-kotick-activision-blizzard-lawsuit-2657263694
Like, it’s pretty obvious that this merger wasn’t for the workers or gamers It was to avoid the recent and constant legal issues they’ve started facing.
https://gbatemp.net/threads/blizzar...he-us-justice-dept-over-esports-wages.630254/
Announced the same day

Every time they face legal issues, they’ve done something else to distract from those issues

 

[kehkou]

MS, AB: Suspending UK operations in 3...2...

 

[SkittleDash]

I really hope this deal goes through. Means no more spending full price for decade old games thanks to Game Pass.

 

[Jayro]

I really hope this deal goes through. Means no more spending full price for decade old games thanks to Game Pass.

I don't want it to go through. They own enough shit, and this is a monopoly.

 

[ombus]

The 3 billion should be paid by those who prevent the purchase.. if it comes to that i hope microsoft sues them.

 

[eriol33]

Video game consoles are dying breed anyway.

 

[Jayro]

The 3 billion should be paid by those who prevent the purchase.. if it comes to that i hope microsoft sues them.

Nah, fuck this whole monopoly they have going on. We need a lawfirm to break Microsoft up, if anything. They've bought up too much shit. Who's next on their list to gobble up? Sega? Capcom? Epic? Where and when will it end? If one company owns everything (except for Nintendo, they'd never sell out) then there won't be any competition. That's BAD for us consumers!!!

 

[danny19901]

You have a bit of a point. Xbox is buying out gaming companies in order to have a stronger presence in game development, but it seems they're wanting to completely wipe out the competition, which is actually against the laws of various regions.

It's ironic with this one, though - Microsoft saw that CMA would ban it if it became exclusive on a local basis, so they make a deal with Nintendo, but now it's the cloud platform that the CMA is worried over. Microsoft is wanting this company soooooooooooo baaaaaaaaad!!! So much so, it's suspicious.

Funny thing is they may of made deals with Nintendo and stuff but who's to say they won't just release 1 call of duty game and say it's to much effort I mean in the Bethesda deal they said weren't gonna use it for exclusives but Redfall and Starfield are being exclusive is a huge reason not to trust Xbox/Microsoft. And since there other studios they have don't seem to being able to release a game in such a long period is concerning really.

Sent from my 2201122G using Tapatalk

 

[Kunty]

Sorta ridiculous, but realistically can they really stop a company from merging for just one region?

What would they do if it went ahead anyway - big fine? Bar further business transactions?

Yes they can stop it. If they forced it through without approval it would be illegal and that opens up a whole new mess to try and resolve. It could potentially become a criminal investigation because of fraudulent acquisition which Microsoft would not want to deal with. Restricted business in the UK would be the least of their concerns in that case.

 

[Sir Tortoise]

MS, AB: Suspending UK operations in 3...2...

This is very accurate because they wouldn't finish the countdown.
Right now they're making comments in the media about how this shows the UK is worse for business than the EU, and sure, valid for unrelated reasons, but it's also a hilariously transparent attempt to embarrass the government post-Brexit and trigger a reversal. Watching a huge corporation like Microsoft threaten to throw a tantrum in front of their parents is amazing.

 

[tech3475]

MS, AB: Suspending UK operations in 3...2...

Their response:
BBC News - Microsoft in furious attack on UK as major gaming deal blocked
https://www.bbc.co.uk/news/business-65407005

 

[Bladexdsl]

you thought activation was bad before just wait till ol mic gets hold of them.