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Forums - Gaming Discussion - CMA blocks MS /ABK merger (Update: UK gov smears the CMA)


Microsoft / Activision deal prevented to protect innovation and choice in cloud gaming

The CMA has prevented Microsoft’s proposed purchase of Activision over concerns the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.

  • Microsoft’s solution had significant shortcomings and would require regulatory oversight by CMA
  • Panel Chair: “Cloud gaming needs a free, competitive market to drive innovation and choice”

Microsoft’s proposal contained a number of significant shortcomings connected with the growing and fast-moving nature of cloud gaming services:

  • It did not sufficiently cover different cloud gaming service business models, including multigame subscription services.
  • It was not sufficiently open to providers who might wish to offer versions of games on PC operating systems other than Windows.
  • It would standardise 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, as would be expected in the absence of the merger.

Given the remedy applies only to a defined set of Activision games, which can be streamed only in a defined set of cloud gaming services, provided they are purchased in a defined set of online stores, there are significant risks of disagreement and conflict between Microsoft and cloud gaming service providers, particularly over a ten-year period in a rapidly changing market.

Accepting Microsoft’s remedy would inevitably require some degree of regulatory oversight by the CMA. By contrast, preventing the merger would effectively allow market forces to continue to operate and shape the development of cloud gaming without this regulatory intervention.


Update: UK governments respond to MS/ABK criticism? 

In a sneaky post by the British PM on LinkedIn, Sunak announced he's "cutting red tape" and this announcement includes the obvious right-wing buzz words like "de-regulations" and being "friendly to businesses" and targeting regulators. The statement in full can be read here (exclusively on a Microsoft-owned social platform, of all platforms). The following are some notable snippets:

    • 2. We’ll reform the Better Regulation Framework so that regulation is the last, not the first, response of government. This is game-changing in the way we approach British business as it ensures that regulation at the heart of government decisions is streamlined and forward-looking.    
    • 3. We’ll make sure regulators are laser-focused on prioritising economic growth by ensuring regulatory action is taken only when it’s needed. We expect all regulators to be working towards economic growth, so we’ll lead a consultation on refreshed guidance to help them achieve this. 
    • 5. We’ll encourage innovation, investment and growth by announcing two strategic policy statements to steer our regulators. This week we’ve published the first of three statements for consultation on energy policy. Next up is our strategic steer to the Competition and Markets Authority (CMA).
    • The reforms we are announcing this week represent an important change in approach and send a clear signal to regulators that our number one priority is growing the economy.

Commenting on the package of measures, Business and Trade Secretary, Kemi Badenoch said:

    • “I have listened to the concerns of business of all sizes and have made it a priority to tackle the red tape that holds back UK firms, reduces their competitiveness in global markets and hampers their growth. We are taking back control of our laws after Brexit, reducing and improving regulation and giving businesses the freedom to do what they do best – sell innovative products, create jobs and grow the economy.”

However, Unite, the UK’s leading union slammed the announcement branded it a “boost for bad bosses”;

    • Unite general secretary Sharon Graham said: “The government so-called attack on red tape is nothing more than a boost for bad bosses and will pile more misery on workers. Removing the requirement for employers to record workers’ hours, means that the regulations effectively become unenforceable. Unscrupulous employers will use these emasculated regulations to exploit young or unorganised workers. Cutting red tape? More like a playbook for profiteering”


Update, 15th of May, 2023:

Last edited by LurkerJ - on 15 May 2023

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MS response

"We remain fully committed to this acquisition and will appeal," Brad Smith, vice chair and president of Microsoft, said. "The CMA's decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK."

The CMA said the deal would solidify Microsoft's advantage in the market by by giving it control over blockbuster games Call of Duty, Overwatch, and World of Warcraft. The watchdog found that without the merger Activision would be able to start providing games on cloud platforms in the future.

"The CMA's report contradicts the ambitions of the UK to become an attractive country to build technology businesses," an Activision spokesperson said. "We will work aggressively with Microsoft to reverse this on appeal."

  • Update 1: Appeal process in the UK could push the deal into 2024
  • Update 2: Industry analyst Piers Harding-Rolls noted on Twitter that the UK's Competition Appeal Tribunal aims to deal with most cases within nine months. If Microsoft wins, the case will be returned to the CMA.
Last edited by LurkerJ - on 26 April 2023

AKB response:

An Activision Blizzard spokesperson in a statement to GamesIndustry added, "The CMA's report contradicts the ambitions of the UK to become an attractive country to build technology businesses. We will work aggressively with Microsoft to reverse this on appeal.

"The report's conclusions are a disservice to UK citizens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that - despite all its rhetoric - the UK is clearly closed for business."

I am shocked by the CMA decision. I believe it's the right decision but I don't think it will last, MS has too much power to let this one go. Not to mention, Xbox is their last consumer facing brand, the tiktoc generation does everything possible to avoid computing on anything that isn't their smartphone, in other words, Windows and MS dominance will continue to be relegated to the enterprise sector if MS doesn't secure the Xbox brand and the inevitable Xbox store on iOS/Android, this deal must pass. 

As for the MS "deals" with gaming cloud providers, I am glad the CMA has more insight on the matter than your average gaming forum goers we have here. 10 year COD deals are meaningless and frankly insulting, because it means every other game from Bethesda and ABK won't necessarily make it to other platforms and competition will still be suppressed by MS undeniable (bought) advantages. It's especially insulting giving the fact that streaming games over the cloud doesn't involve "proper" porting, i.e., it isn't resource intensive at all to sign the same deal for all Bethesda/ABK games.

Great news

Don't think it will last, but we can hope

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Activision stock down 10%?

Lets hope in the end this deal never finishes.


The CMA wins the majority of cases, it is unlikely MS will win.

Whenever life gets you down. Whenever you think you aren’t good enough. Just remember. You could be Phil Spencer right now. :)

I really wish Microsoft would just drop this and go back to buy independent studios. I see the why they want Act/Blizzard but I don't think it is worth the hassle (nor the money).

chakkra said:

I really wish Microsoft would just drop this and go back to buy independent studios. I see the why they want Act/Blizzard but I don't think it is worth the hassle (nor the money).

Curious how many independent studios SONY helped establishing will end up being acquired by them and how bigger existing PS studios will be by the time this deal closes.