The blocking of the purchase of Activision Blizzard King has been the topic of the week and the controversy has not taken long to generate due to the arguments used by the British regulator to stop Microsoft’s intention. From a general perspective, the nascent cloud gaming sector is known to be the problem, but there is more to it than that.
Video: Microsoft paid $70 billion for Activision Blizzard
The CMA does not trust Microsoft or its commitments
After the UK Competition and Markets Authority (CMA) made official the blocking of the purchase of Activision by Microsoft, the documents came to light and have been the subject of analysis to understand the reasons why the regulator made this decision. Months ago, Microsoft tried to convince regulators by offering 10-year deals for Call of Duty and other Activision franchises to platforms from companies like Nintendo and Nvidia, however the CMA deemed this insufficient and explains why.
As shared by Axios journalist Stephen Totilo, the CMA considered that Microsoft’s proposal and remedies are insufficient since the company would gain a privileged position that allows it to define the type of treatment and business model of everything that has to do with it. with Activision Blizzard King. In this regard, the regulator points out that the control of the publisher in the hands of Microsoft would restrict the access of companies related to cloud gaming to the video game catalog, in addition to the fact that there would be no freedom to propose business models. In this regard, he considers that the gaming industry and its business is dynamic, so the models and strategies of the competitors change rapidly and in this case, Microsoft would be a wall to develop those opportunities.
The full UK decision about the Microsoft-Activision deal helps explain why Microsoft’s 10-year cloud commitments to other firms failed to persuade the regulators, who found them:
– too narrow
– too focused on having to buy the games
– too Windows-centric
– too brief pic.twitter.com/E2notE5Wwc
— Stephen Totilo (@stephentotilo) April 27, 2023
On the other hand, the CMA fears that there is dependence on Windows and mentions that there is a risk that Microsoft uses its power and presence in the cloud to privilege the versions of Activision Blizzard video games that run from the cloud in their operating systems and putting them advantage over others, for example Linux.
Finally, the CMA concluded that the 10-year agreements that Microsoft signed with companies to guarantee Activision Blizzard game releases is a remedy with “weaknesses” since it initially reveals that there are no conditions to monitor the proper functioning of this relationship and commitment. Also, it is feared that the company will give advantage to its gaming platforms in the cloud, which could generate conflicts with competitors. Basically, the point of both ideas is that it is thought that Microsoft will not remove content from its rivals but will find ways to make everything work better on its own platforms.
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Video: Nightmare for Microsoft: they block the purchase of Activision Blizzard
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