The proposed acquisition of Activision Blizzard King by Microsoft has just been delayed. Here is the latest of this never-ending story.
The Verge just broke that the proposed acquisition of video game publishing giant Activision has been pushed back to October of this year. Initially, the deal was set to close on July 18 but was extended to October 16 to appeal to the United Kingdoms Competition and Markets Authority (CMA) decision which had blocked the deal in the UK back in April.
All of this is hot off the heels of the United States Federal Trades Commission (FTC) initially blocking the deal earlier this year, only to be successfully appealed in the wildly publicized court trial. Other attempts by the FTC to block the deal have also been rejected by US Court.
Why does the Approval of the Microsoft – Activision Deal Matter?
To boil it down, a merger of this size has to be approved by governing bodies around the world to stop the birth of a monopoly. And while Microsoft (MS) already has a massive market share in the space of computing, the gaming and console markets have them as the runner-up behind Sony’s PlayStation and Nintendo.
And a $68.7 billion USD in an all-cash deal to buy the publisher in both the console and mobile market was sure to raise some eyebrows. The fear of regulators and gamers is that MS with its endless resources could simply spend its way to the top of the food chain and gobble up the entire industry. Which would objectively be the worst case for everyone, besides MS.
Should the UK’s CMA and other outstanding commissions choose to reject the deal, MS and Activision won’t be able to sell any of their gaming-related products in these regions. And considering that the UK is home to some of Microsofts biggest studios such as Rare (Sea of Thieves) and Playground Studios (Fable 4) this could lead to even more issues for the tech-titan.
Why did the CMA block the Microsoft – Activision Deal?
The UK’s Market Authority had initially blocked the deal mainly because of concerns that MS would use the Call of Duty franchise to corner the Cloud Gaming market space which is still developing. Cloud Gaming itself is a hot topic, while the Game Pass Ultimate is functional it is far from perfect.
Not long ago Google had shut down its own venture into the space with Stadia after it couldn’t pull the users or profits to justify its existence.
The big players in this space are MS with their Xbox Cloud, making use of their extensive Game Pass catalog, Sony’s PlayStation Now which focuses its expansive backlog of now inaccessible titles, and GeForce Now by Nvidia which is more on the PC platform. All of them were decently successful but with their issues.
In order to remedy this, MS had vowed and offered deals that would guarantee that Call of Duty, which is one of the largest franchises in all of gaming, would be made available for at least 10 years for anyone who signs it. This was deemed by regulators to be insufficient, stating that Microsoft’s previous purchase of ZeniMax and Bethesda had already limited customers’ access to games on their chosen platform.
We’ll of course keep updated as the situation develops here on ESTNN
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