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.
