What you need to know
- Microsoft's acquisition of Activision Blizzard King will cost the company $68.7 billion, a record-breaking deal for the gaming industry.
- The deal has been approved by a majority of regulators including Brazil, China, and the European Union.
- The UK CMA ruled against the acquisition on the grounds of protecting the nascent cloud gaming market.
- Microsoft has appealed the ruling and continued to broaden their deals with cloud gaming providers in an attempt to assuage the regulating body.
Update, May 26, 2023, at 3:15 p.m. CT — The UK's Competition Appeal Tribunal (CAT) has revealed that Microsoft's appeal against the CMA over its ongoing Activision Blizzard acquisition will begin midday on Tuesday, May 30, 2023.
The announcement also includes a summary of Microsoft's appeal, which lists the five grounds on which Microsoft is contesting the CMA's decision to block the deal, including the CMA's "fundamental errors" when calculating the size and impact of the cloud gaming market (and Microsoft's position in it), failing to recognize Microsoft's agreements with cloud gaming competitors, wrongfully concluding that Activision Blizzard's library of games is vital to the success of cloud gaming and that those titles would come to cloud gaming competitors without the deal closing, not accepting Microsoft's various attempts to remedy the situation with accommodations, and more. You can read the full summary at the link above.
In case you missed it, some information recently came to light that shows the CMA's senior director, involved in the decision to block the Activision Blizzard acquisition, previously worked for a firm that is now assisting Sony in battling the Microsoft and Activision Blizzard deal, highlighting a potential conflict of interest. Florian Mueller, a prominent lawyer that helped discover the above information, has also provided their own analysis of Microsoft's appeal on Twitter.
Our original article continues below.
Microsoft has confirmed that an appeal has been filed with the UK's CAT, or Competition Appeal Tribunal, in an attempt to overturn the CMA's ruling against the Activision Blizzard King acquisition, according to a tweet from Bloomberg reporter Katharine Gemmel.
A Microsoft spokesperson has confirmed the company has formally filed its appeal against the UK antitrust watchdog’s decision to block its $69 billion Activision Blizzard deal. On Terminal.May 24, 2023
Microsoft's acquisition of Activision Blizzard King had come under heavy scrutiny from the UK's regulatory body, who first expressed concerns over the Call of Duty franchise before pivoting their arguments against the merger to Xbox's dominance in the cloud gaming market. Microsoft had attempted to assuage these concerns over cloud gaming by striking deals with a multitude of other cloud gaming platforms to bring Xbox titles to their services, including Activision Blizzard King titles that otherwise would not reach cloud markets. The CMA was unmoved by these efforts, however, and ultimately struck down the acquisition in its ruling.
The CMA has been the only regulatory body to rule against Microsoft and Activision Blizzard King. The European Union has approved the acquisition, stating that Microsoft's remedies of their concerns regarding the cloud market were sufficient to allow the deal to close. The CMA reacted by issuing a statement that the EU was wrong to approve the merger. In the US, the FTC has filed a lawsuit against the acquisition, but opted not to file for an injunction that would actually prevent the merger from closing.
The CMA's ruling against the ABK deal has become a political hot point for the UK, but Microsoft has continued to confirm their commitment to fighting for the acquisition to close in their favor and to add the expansive Activision Blizzard portfolio to its first-party roster of the best Xbox games.
Call of Duty: Modern Warfare 2
Xbox may be struggling to acquire Call of Duty publisher Activision Blizzard King, but you can still add COD to your Xbox library without interference from any regulators.
Available now: Xbox
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Cole is the resident Call of Duty know-it-all and indie game enthusiast for Windows Central. She's a lifelong artist with two decades of experience in digital painting, and she will happily talk your ear off about budget pen displays.
- Zachary BoddyStaff Writer
Too much attention is being paid to the XBOX (and cloud speculation) side of the deal and virtually none to the two more important drivers for the deal:Reply
- First of all, Activision has been in recent times a poorly run company. Not just in the allegations of the work environment but rather on the business side, where their treasure trove of IPs and staff creativity has been neglected of CALL OF DUTY. MS has already indicated they intend to mine those fallow IPs of which over a dozen have been identified by the gamer community. It isn't just ABK shareholders who stand to benefit but also the staff, who can't help but notice the creative boost OBSIDIAN received under MS. Never mind AVOWED, look to GROUNDED and PENTIMENT; would either have come to market before MS?
2- Second, Microsoft's biggest gain is going to come from the mobile space. Not just from the KING catalog, but from the leverage they can apply with it. (The proposed XBOX mobile app store is a big part.) Also, the IPs themselves could move to other platforms, notably SMART TVS, starting with the Android related ones. While Sony frets over their 100M consoles and CMA over whatever fraction on GamePass resides in the UK, MS is looking at the billions of phones and TVs. Even a small slice is worth more than Sony itself. And Activision has been doing precious little to move there.
Microsoft's stake in this goes far beyond the $7-9B annual revenues ABK brings in these days so they'll get the deal done, UK or no UK.