Despite all the hype surrounding Xbox vs. PlayStation, it was Britain’s unexpected decision to block Microsoft’s record-breaking Activision Blizzard merger that was the driving force behind the decision.
Since Brexit, Britain’s Competition and Markets Authority (CMA), which has become more aggressive in pursuing “Big Tech,” has raised reservations about the $69 billion agreement. Microsoft has been working for months to address these concerns.
The decision establishes a precedent for the European Commission, which will render its own decision next month, and the U.S. Federal Trade Commission. The American corporation has promised to appeal the decision.
Microsoft promised Sony that future iterations of “Call of Duty,” one of the most profitable gaming series, will be accessible on the PlayStation at the same time as on the Xbox, for a period of ten years. Nintendo got a comparable agreement.
That only addressed the CMA’s console-related concerns, leaving cloud gaming as the lone – and ostensibly smaller – obstacle.
Cloud gaming is not easily defined.
According to a response to the CMA’s enquiry by Joost Rietveld of the UCL School of Management, platform types and business models are still developing and numerous ‘gaming as a platform’ services, like Google Stadia, have had difficulty succeeding.
Since cloud gaming is only “a feature,” according to Microsoft, which provides the Xbox Game Pass service, Activision has chosen not to make its games available on these platforms.
The CMA disagreed, claiming that while consoles were a mature market, cloud gaming was the industry segment that was growing the fastest.
It claimed that Microsoft already controlled 60–70% of the world’s cloud gaming services and had additional advantages because to Xbox, Windows, the most popular PC operating system, and Azure, a cloud service provider.
Microsoft has agreed to make several Activision titles available on Nvidia, Boosteroid, and Ubitus, among other cloud-based gaming platforms.
However, the CMA claimed that Microsoft’s remedies ignored other subscription models, such as a Netflix for video games, or companies that did not use Windows on PCs.
In a brand-new, dynamic market, “(Microsoft’s) proposals were not effective to address our concerns and would have replaced competition with ineffective regulation,” it claimed.
Ben Barringer, an equity research analyst at Quilter Cheviot, stated: “The UK regulator has taken an actively tough approach when it comes to anti-competitive behavior ever since Brexit.
This stance, it was ultimately determined, “is what has led to its decision to halt the acquisition, as it judged that ‘cloud gaming needs a free, competitive market to encourage innovation and choice’ and Microsoft already has a strong position.
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