The CMA blocks Microsoft’s Activision Blizzard deal over cloud

In a somewhat unsurprising turn of events, UK regulators, the Competition Market Authority, have blocked the Microsoft – Activision Blizzard deal over concerns that it would hurt competition in the cloud gaming space.

For more than a year Microsoft has been fighting to get its acquisition of Activision Blizzard approved. With Sony doing everything it can to stifle those efforts at every single turn. Cloud had always been included in the CMA’s concerns. But for most of that time the main concern had been over Microsoft withholding games from other console platforms.

Like blocking future releases of Call of Duty from being available on PlayStation. Eventually however, the CMA felt that consoles were less of a concern. As Microsoft withholding such games from other consoles would lead to an immense amount of lost sales revenue.

Even still, the CMA says that approving this merger would allow Microsoft to have too much power. Stating that should Microsoft be allowed to buy Activision Blizzard, it would alter the future of the fast-growing cloud gaming market. The CMA thinks this would lead to less innovation and player choice in the UK.

The Microsoft – Activision Blizzard deal was blocked over a few key points

According to the CMA’s report, there were multiple areas of concern that lead to its overall decision to block the deal. But a few key points are highlighted. Microsoft’s proposal didn’t sufficiently cover other cloud gaming service business models. The CMA says that Microsoft was also not open enough to providers who might want to see Activision Blizzard games on PC platforms other than Windows.

It also notes that this deal would let Microsoft “standardize the terms and conditions on which games are available, as opposed to them being determined by the dynamism and creativity of competition in the market.” Without the deal, the CMA believes that Activision will start offering its titles via cloud services in due time. And that players will ultimately have more choice this way.

Because they won’t be forced to choose a service based on what titles are available. Instead, they would have a larger selection of services. And could then choose the one that’s best suited based on other factors.