U.K. Blocks Microsoft’s $69 Billion Bid for Activision, a Blow for Tech Deals
New York TimesNov 25, 2022
UK: Microsoft's $75B Activision Blizzard Purchase Rejected
Image copyright: Activision Blizzard [via The Wall Street Journal]
The Facts
On Wednesday, the UK's Competition and Markets Authority (CMA) rejected Microsoft's $75B deal to buy video game maker Activision Blizzard Inc., arguing that the proposed acquisition poses a threat to competition in the UK’s gaming industry.
The CMA estimates that Microsoft controls around 60-70% of global cloud gaming services and, if it acquired Activision's Call of Duty, Overwatch, and World of Warcraft, it would give the company a significant advantage in the market.
The Spin
Narrative A
This decision doesn't make sense given that cloud gaming makes up a small proportion of the entire video game industry. If the CMA was making an anti-trust argument to protect the UK from video game monopolies, wouldn't it base its decision on the consoles people use to play video games like Xbox and PlayStation?
Narrative B
The video game industry is a dynamic and creative one, and monopolizing an entire industry would diminish that creativity from other game providers. Microsoft didn't offer PC providers other than Windows access to the games, nor did it suggest allowing games other than those in its terms of service to be on its service, which goes directly against market competition. Well-calculated regulation made total sense here.