Everything seemed to indicate that the CMAthe United Kingdom’s antitrust authority, was going to give the go-ahead to Microsoft’s purchase of Activision-Blizzard, however, the body has recently officially published its decision to block the operationwhich obviously represents a setback in the plans of the giant from Redmond.
The CMA has explained through a press release that it “has prevented Microsoft’s proposed purchase of Activision-Blizzard due to concerns that the deal would alter the future of a rapidly growing cloud gaming market, leading to to a reduction in innovation and less choice for UK players in the coming years.”
The antitrust authority, in its key points, has noted that “Microsoft’s solution had significant deficiencies and would require regulatory oversight by CMA.” On the other hand, Martin Coleman, president of the CMA, has indicated among his statements that “cloud gaming needs a free and competitive market to drive innovation and choice”.
Our readers will know by now that Microsoft reached an agreement to buy Activision-Blizzard in exchange for 69,000 million dollars. That movement was a hard blow for Sony that was reflected in the stock market, especially due to the possibility that Call of Duty, the most popular video game saga in the world, would stop appearing for PlayStation consoles. That was the main argument used by the Japanese giant to convince the antitrust authorities not to authorize the operation.
Sony seemed to be convincing at first, but Microsoft knew how to make a more intelligent reading of the situation to make the waters flow in its favor, coming to win the support of the authorities of many countries, including those of Japan. However, as we have already said, the United Kingdom, the United States and the European Union are the important squares, and it must not be forgotten that the CMA was the institution that sank NVIDIA’s intentions to take over ARM.
Due to the threat of PlayStation running out of Activision-Blizzard games, which would only depend on an order if it ended up being a subsidiary, Microsoft maneuvered to reach ten-year agreements to bring the Call of Duty saga to Nintendo consoles and platforms like NVIDIA GeForce Now. However, it seems that these agreements have not satisfied the CMA, which focuses its arguments to block the operation on the cloud gaming.
In the verdict published by the CMA it can be read that, “in cloud games, our evaluation is different. Microsoft already has strong advantages in this market. Owns Windows, which is by far the leading operating system for PCs and the operating system on which most PC games run; It has an important infrastructure and systems in the cloud through Azure and Xcloud; and has a strong gaming base through its ownership of Xbox and a portfolio of leading games. No other cloud gaming operator has this combination of advantages. Some of these strengths are already reflected in Microsoft’s current cloud gaming market share, which in the UK is between 60-70%.”
“Activision games like Call of Duty, Overwatch and World of Warcraft are among the most popular content available on consoles and PC. We found that Activision games are likely to be important to cloud gaming services in the future. While Activision has not yet offered its games on a cloud gaming service, the evidence shows that it will have strong incentives to do so, particularly given the significant growth projections for cloud gaming. We concluded that, without the merger, Activision games would be available on cloud gaming services in the UK in the near future.”
Therefore, we have come to the conclusion that Combining Activision’s strong portfolio of games with Microsoft’s multiple current cloud gaming strengths would allow Microsoft to hurt current and emerging cloud gaming competitors by denying them Activision games and, unlike in the case of consoles, we have not found any material reason to stop doing this.
In short, the fact that Microsoft is the owner in commercial terms of the losing platform in the video game console market, Xbox, does not justify an operation that would allow it to expand its already clear dominance in sectors such as cloud gaming and locally installed video games on PCs, as Windows is by far the most widely used operating system for desktop computing. Yes indeed, none of that is going to stop Microsoft and Activision-Blizzard appeal the decision made by the CMA Or at least try, so for the moment the matter should not be shelved.
The CMA re-establishes a 360-degree and truly cross-platform approach to this topic. Microsoft took advantage of Sony’s contempt for Nintendo as an argument to say that PlayStation enjoys a clear dominant position in the desktop video game console sector, to which should be added its alleged dirty maneuvers, but the CMA has reminded the Redmond giant that it enjoys precisely that same position in the cloud gaming and local installations on PC.
The conclusion to be drawn from the CMA decision is that Microsoft (Xbox), Sony (PlayStation), and Nintendo are not little sisters of charity, but for-profit corporations playing their cards in the marketplace, all of whom have sins and contradictions in their curricula.
