UK's Watchdog Clear Microsoft's Deal to Acquire COD Game Maker
UK’s watchdog Competition and Market Authority has given Xbox games maker Microsoft to buy Activision Blizzard, a company that owns hit games like Call of Duty, and World of Warcraft.
Big relief for Microsoft as the UK’s competition watchdog The Competition and Market Authority(CMA) has approved the deal to acquire Activision Blizzard, the maker of popular games Call of Duty and World of Warcraft.
Microsoft has faced opposition to the deal from regulators and some of its rivals, including PlayStation games console maker Sony.
The CMA blocked the deal in April suspecting that this deal will lead to the monopoly of Microsoft-maker of the gaming console Xbox in the emerging cloud gaming market. The CMA said that Microsoft would find it commercially beneficial to make Activision’s key games, such as Call of Duty, exclusive to its cloud gaming platforms.
However, last month the watchdog said a revised deal that included selling cloud gaming rights outside Europe to Activision Blizzard’s French rival Ubisoft had addressed its concerns, indicating the tie-up would be approved.
In a statement Sarah Cardell, the CMA’s chief executive said: “With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market. As cloud gaming grows, this intervention will ensure people get more competitive prices, better services, and more choice.”
The acquisition agreement with Activision Blizzard was about to expire on October 18.
This megadeal is a landmark for Microsoft as its Xbox is trailing behind Sony's Playstation 5 and Nintendo Switch. With Activision’s games, Microsoft will be able to draw more customers into its cloud gaming service. Analysts have pointed out that till now cloud gaming has remained niche. Google and Amazon have failed to capture this market.
The CMA became isolated when its counterparts in the EU approved the deal after Microsoft offered alternative concessions on cloud gaming rights. Apart from CMA, the Federal Trade Commission of the USA was also against the deal but couldn't stop it in court.
Cloud games are streamed from servers, rather than accessed from a disc or cartridge onto a gaming console or computer. The market size of the global cloud market is $5.7 billion in 2023 and is expected to reach $84 billion by 2030 with a CAGR of 46.9%.
