Why The Microsoft Activision Deal Was Blocked By The UK Government – SlashGear

Microsoft offered to keep properties like “Call of Duty” on Sony’s PlayStation platform for ten years, and even inked one such deal with Nintendo, rather than keeping these popular franchises exclusive to the Xbox ecosystem. However, the UK’s competition watchdog notes that Microsoft’s solution failed to “sufficiently cover different cloud gaming service business models, including multigame subscription services.” The CMA also added that Microsoft failed to adequately address the freedom of choice for developers to offer their games on PC platforms other than Windows.

The CMA further argues that accepting Microsoft’s proposal would essentially amount to regulatory oversight. On the contrary, blocking the acquisition would allow the gaming segment and market stakeholders to grow at their natural pace and foster the development of cloud gaming without any need for regulatory interference. Microsoft argued that putting Activision Blizzard games on its Xbox Game Pass subscription service would make it more affordable for users to enjoy those games. 

However, the CMA argues that Microsoft has all the incentives under its belt to increase the Game Pass price down the road, effectively negating the erstwhile benefit. The CMA blocking is a major setback for Microsoft, but the company also has to fight furiously against regulators in the EU bloc and will have to assuage the concerns raised by the US FTC, which filed a lawsuit to block the acquisition. Microsoft says it will appeal the CMA’s verdict, with vice chair and president Brad Smith saying on Twitter that the “CMA’s decision rejects a pragmatic path to address competition concerns.”