In January 2022, Microsoft announced plans to acquire Activision for $68.7 billion
This week saw movement around Microsoft’s ambitions to purchase game publishing giant Activision Blizzard for nearly $70 billion. The U.K.’s Competition and Markets Authority (CMA) extended the deadline for a review of the deal, even as it faces ongoing opposition from the U.S. Federal Trade Commission (FTC).
Initially, the CMA blocked the takeover attempt, claiming the deal would lead to “reduced innovation and less choice” in the cloud gaming market. When the deal was first announced in January 2022, it was believed that the acquisition would substantially further the cloud company’s position in the competitive gaming industry, as well as strengthen its role in the emerging metaverse market. Both advantages that trade and consumer watchdogs felt gave it too much of a market advantage.
After an in-depth review of the deal in September 2022, and in February of this year, the CMA provisionally found that the deal could make Microsoft “even stronger in cloud gaming, stifling competition in this growing market.”
“Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service,” claimed the CMA, adding that the company already accounts for an estimated 60-70% of global cloud gaming services.
While the CMA is certainly not wrong about the scope of Microsoft’s gaming ambitions — in recent years, the tech company has turned its gaming business into a beast that rakes in $10 billion a year — it is now willing to spend more time on its assessment. In a statement, the Authority said it has added six weeks to a deadline for issuing a ruling on the proposed acquisition, citing “special reasons.” This puts the new deadline at the end of August.
According to Bloomberg, the CMA is likely reconsidering its block of the deal after a U.S. judge dismissed FTC concerns last month.
The Activision acquisition, if ultimately given the green light, will become the largest in gaming history. This is not the first time Microsoft has significantly shaken up the gaming industry, with one of its biggest moves being the 2020 purchase of ZeniMax Media, the parent company of well-known video game publisher Bethesda Softworks for $7.5 billion.
The company also makes Xbox consoles, has its own cloud gaming service and owns Mojang, the company that develop the popular crafting game Minecraft since 2014.
