(London) The British competition authority (CMA) on Wednesday jeopardized the mega-merger between Microsoft and Activision Blizzard by announcing its decision to block the operation, citing the risks of too much concentration, but the computer giant will appeal .
The CMA says it “concerns the deal will change the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers in years to come”, according to a press release from the regulator on Wednesday.
London had launched in mid-September an in-depth investigation into this $ 69 billion transaction between the online video game giants, a record sum for the sector, made public in early 2022.
The takeover by Microsoft of Activision Blizzard, which notably publishes the successes “ Call of Duty ”, “ World of Warcraft ” and “ Candy Crush ”, would give birth to the 3rd player in the video game industry in terms of turnover, behind Chinese Tencent and Japanese Sony, maker of the PlayStation.
The CMA considered at the end of March that the operation did not ultimately pose a competition problem for game consoles, but that concerns persisted about dematerialized game services.
“Microsoft has engaged in constructive dialogue with us to try to resolve these issues […], but their proposals have not been sufficient,” said Martin Coleman, chairman of the group of independent experts in charge of this investigation by the CMA.
“Cloud gaming needs a free and competitive market to drive innovation and (consumer) choice. The best way to achieve this is to allow the current competitive dynamics of cloud gaming to continue ”, he added, quoted in the CMA press release.
“We remain fully committed to this acquisition and will appeal,” Microsoft reacted on Wednesday in a statement sent to AFP.
“We are particularly disappointed that after much deliberation, this decision appears to reflect a misunderstanding of this market and how cloud technology actually works,” according to Microsoft.
The merger is also raising concerns across the Atlantic, where the US competition authority (FTC) launched lawsuits in December to block the deal, and in the EU, which has also opened an investigation into whether the acquisition would make Activision’s games exclusive to the Xbox.
The UK market is smaller than the US or EU market, but if the London block is upheld on appeal, it could force Microsoft to back out of the deal.
