Activision Blizzard, Blocked

The CMA blocked Microsoft's $70 billion Activision Blizzard acquisition.

The UK's Competition and Markets Authority blocked the proposed deal in April 2023. The regulator cited significant concerns regarding the future of the cloud gaming market.

The CMA feared Microsoft would restrict access to major titles.

The regulator concluded the merger would stifle innovation and reduce consumer choice. Microsoft could restrict access to Call of Duty, Overwatch, and World of Warcraft to its own cloud gaming services.

Cloud gaming risk. The CMA cited concerns that the merger would stifle competition in the cloud gaming market.

The CMA rejected Microsoft's ten-year licensing agreements as insufficient.

Microsoft sought to secure the deal through ten-year licensing agreements with competitors like Nintendo and Steam. The CMA deemed the impact of these concessions highly uncertain and insufficient to mitigate the risks of market dominance.

Activision Blizzard's stock price fell significantly after the ruling.

The ruling caused an immediate market reaction. Activision Blizzard’s stock price fell significantly as analysts questioned the viability of the deal.

Stock decline. Activision Blizzard’s stock price experienced a significant decline following the decision.

Microsoft announced plans to appeal the CMA ruling.

Microsoft expressed strong disagreement with the decision, characterizing it as a flawed understanding of the gaming industry. The company announced plans to appeal the ruling.

The deal faces additional scrutiny from the EU and FTC.

The outcome serves as a critical pivot point for the broader gaming industry. Ongoing scrutiny from the European Union and the United States Federal Trade Commission further complicates the merger's path.

Ongoing scrutiny. The deal continues to face additional regulatory scrutiny from the European Union and the U.S. Federal Trade Commission.

Microsoft and the CMA disagree on the state of cloud gaming.

Microsoft argued that cloud gaming remains a nascent and unproven technology. The CMA prioritized the potential for long-term market distortion, particularly given Microsoft’s existing infrastructure advantages through Windows and Azure.

Fundamental disagreement. The ruling reflects a fundamental disagreement between Microsoft and the CMA regarding the current state and future trajectory of cloud gaming.