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UK blocks Xbox buyout of Activision

UK blocks Xbox buyout of Activision
UK blocks Xbox buyout of Activision

Several headaches are taking Microsoft Xbox since the announcement of the purchase of Activision for no less than 69 billion dollars in January of last year. Following its court fights with Playstation, the first setback comes from the UK’s Competition and Markets Authority (CMA) announcing against the deal .

Although many believed that after several months of litigation the deal would end up being approved by the main regulatory bodies, the UK CMA has officially spoken out against Activision Blizzard Entertainment being acquired by Microsoft due to fears that it will become the only option available to gamers within cloud gaming services for years to come.

The CMA does not want an Xbox monopoly in the cloud

Xbox Gamepass in the cloud could be the reason for the purchase not going through

While in the past months everyone has focused on the concept of monopoly within the spectrum of video games for consoles, with Sony expressing its concern about the future exclusivity of franchises like Call of Duty, finally the CMA has changed its angle expressing the need to greater freedom in the cloud services market.

“Cloud gaming needs a free and competitive market to drive innovation and choice. Microsoft already enjoys a powerful position and advantage over other competitors in cloud gaming and this deal would strengthen that advantage by giving it the ability to undercut new and innovative competitors,” said Martin Coleman, chair of the CMA panel.

According to this organization, Microsoft currently already has notable leadership in the cloud gaming services market with a presence of between 60% and 70% globally, so adding exclusive proposals such as Call of Duty to its Xbox Game Pass platform would make it impossible for future companies to gain a place in the coming years.

How is the process going? Microsoft and Activision Blizzard have already confirmed that they will appeal the CMA’s decision to the UK Competition Appeals Tribunal and for now there is no change in the intention of the two companies to go ahead with the acquisition. Meanwhile, other organizations in different parts of the world will mark their position in the coming weeks/months.

It is worth noting that it is mentioned that getting a change in the CMA decision could take up to a couple of years, something that would significantly complicate Xbox’s current plans. At the same time, the United Kingdom market is the most important within Europe and one of the main ones globally (even more so for the brand as it has almost no presence in Asia), so this refusal is a very hard blow for Microsoft.