UK’s decision to block Microsoft and Activision/Blizzard deal benefits absolutely no one except for Sony and Tencent.
The UK’s Competition and Markets Authority (CMA) has made an astonishing and severely misguided decision to block Microsoft’s monumental $69 billion acquisition of Activision Blizzard, one of the largest and most influential game publishers in the world. The CMA claims that the deal would harm competition in the emerging cloud gaming market, where Microsoft is a dominant player with its Xbox Game Pass service. However, this argument is based on an utterly flawed understanding of the gaming industry and the undeniable benefits of cloud gaming for consumers.
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First and foremost, the CMA blatantly ignores the fact that Microsoft has already committed to making Activision Blizzard’s games available on other cloud gaming platforms for an entire decade, as part of a proposed remedy to address any potential competition concerns. This would guarantee that gamers on any device could access immensely popular titles like Call of Duty, Overwatch, World of Warcraft, and Candy Crush Saga, regardless of whether they subscribe to Xbox Game Pass or not. Microsoft has also pledged to maintain fair and reasonable terms for licensing Activision Blizzard’s games to other platforms, and to cooperate with regulators to monitor its compliance.
Secondly, the CMA fails to recognize that cloud gaming is not a separate market from traditional gaming, but rather an extension of it. Cloud gaming allows gamers to stream games from remote servers without having to download them or own expensive hardware. This means that gamers can enjoy unprecedented flexibility and choice in how they play, as well as access a larger and more diverse library of games. Cloud gaming also dramatically lowers the barriers to entry for new and casual gamers, who may not want to invest in consoles or PCs, but still want to experience high-quality games on their smartphones or tablets.
Thirdly, the CMA astonishingly overlooks the positive impact that Microsoft’s acquisition of Activision Blizzard would have on the gaming industry as a whole. Microsoft is undeniably one of the most innovative and responsible companies in the sector, with a track record of investing in game development, supporting diverse and inclusive content, and fostering a healthy and safe gaming community. By acquiring Activision Blizzard, Microsoft would be able to leverage its resources and expertise to improve the quality and performance of Activision Blizzard’s games, as well as address some of the serious issues that have plagued the company in recent years, such as allegations of sexual harassment, discrimination, and toxic work culture.
In a world where the Sony PlayStation continues to receive exclusive content and early access for the Call of Duty series, disadvantaging PC and Xbox players, the CMA’s decision further exacerbates the inequality faced by gamers. Additionally, Microsoft’s promise to bring the Call of Duty series over to Nintendo Switch gamers has been snuffed, further emphasizing the unfortunate repercussions of this misguided decision.
Moreover, all consumers lose in this situation. With the Call of Duty franchise in Microsoft’s hands, it would have been available on Game Pass, meaning that gamers would only have to spend AUD$15 a month to play all the Call of Duty titles on both PC, Xbox, and even on mobile devices. Many gamers own multiple copies of Call of Duty titles, simply because they want to play on different platforms, and the current system does not sync Call of Duty Points earned in the game across platforms. This deal would have been incredibly beneficial to most gamers, saving them a significant amount of money and hassle.
Tencent will snatch up Activision
Rumours have circulated suggesting that this deal was blocked due to pressure from the Chinese Communist Party, with whispers that Tencent was ready to make a bid for Activision/Blizzard. While this remains speculative, it is worth considering the implications of such a potential move and how it might further stifle competition and consumer choice in the gaming industry.
Tencent, the Chinese tech giant, has rapidly expanded its gaming empire by acquiring numerous US and UK developers and publishers, raising concerns about the increasing influence of a single company in the gaming industry. Tencent’s aggressive growth strategy includes investments in major studios such as Riot Games, Epic Games, and Supercell, positioning it as a global powerhouse in the gaming sector. With the UK’s Competition and Markets Authority (CMA) blocking Microsoft’s acquisition of Activision Blizzard, it is vital to scrutinize the broader context of such decisions, particularly in light of Tencent’s potential bid for Activision/Blizzard and the implications of its expanding influence on the global gaming market.
What about Disney?
The CMA’s decision is not only hypocritical, but it also stands in stark contrast to other controversial deals approved by both the FTC and its UK counterpart. Take, for example, Disney’s acquisition of the entire entertainment industry, which has garnered significantly less scrutiny despite its far-reaching implications. This raises questions about the consistency and fairness of regulatory oversight in the world of acquisitions and mergers.
By blocking Microsoft’s acquisition of Activision Blizzard, the CMA is not only harming Microsoft’s legitimate business interests but also depriving millions of gamers in the UK and around the world of the benefits of cloud gaming and a better gaming experience. The CMA’s decision is based on a narrow and outdated view of the gaming market, which does not reflect the reality or the potential of cloud gaming. The CMA should reconsider its decision and allow Microsoft to proceed with its acquisition of Activision Blizzard, which would be a win-win situation for both companies and gamers alike.
The UK’s Competition and Markets Authority has made a mockery of its decision-making process by blocking Microsoft’s acquisition of Activision Blizzard. The benefits of this acquisition for consumers are numerous, and it is baffling that the CMA would prioritize a flawed understanding of the gaming industry over the needs of gamers worldwide. It is time for the CMA to reconsider its decision and allow Microsoft to move forward with its acquisition, ultimately providing the gaming community with a more diverse, accessible, and inclusive experience. Only then can we begin to dismantle the unfair practices that have plagued the gaming industry and usher in a new era of innovation and collaboration.