The UK’s competition and markets authority, the CMA, is now the only obstacle to Microsoft’s acquisition of Activision Blizzard King.
The Verge, citing a source familiar with the matter, reported that the CMA is expected to decide whether to approve the nearly $70 billion deal next week, before the end of September. The CMA has to inform the public of its final decision by October 18 to announce whether it will approve Microsoft’s massive expansion two and a half weeks before the deadline.
The CMA has already taken a negative stance on the expansion of the Redmond-based tech giant in April, saying that the cloud gaming market would be profoundly affected if the Bobby Kotick-led publisher were to be taken over by Phil Spencer’s team. Microsoft was originally due to appeal the CMA’s decision in court in July, but in the end, both the CMA and Microsoft requested a stay to allow for an out-of-court settlement. Microsoft then offered to sell the rights to cloud streaming in the UK to Ubisoft in exchange for Activision’s acquisition of Blizzard King.
In August, Microsoft president Brad Smith wrote: “To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the UK Competition and Markets Authority, we are restructuring the transaction to acquire a narrower set of rights. This includes executing an agreement effective at the closing of our merger that transfers the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher. The rights will be in perpetuity.”
If the CMA accepts the offer, the gaming industry will undergo a vast consolidation, and we should add that if there is no competition in the market, the monopolistic company will become impoverished and can take advantage of its position and, for example, raise its prices brazenly.