Board 8 > UK blocks Microsoft acquisition of ActiBlizz

(+) Yeah! (+)

https://twitter.com/jasonschreier/status/1651181545409982466

https://www.gov.uk/government/news/microsoft-activision-deal-prevented-to-protect-innovation-and-choice-in-cloud-gaming

Beat me by a minute!

Xboner of the day

Wow, purely down to cloud gaming at that. Seems like it will completely reframe the debate around this.

Is it final?

I mean, besides the appeal

Cloud gaming being the pain point here is very funny to me.

What's the significance of cloud gaming here? I'm not familiar with UK law, so I don't know how it compares to US rules of preventing monopolies, but I fail to see how that would make a difference here.

Basically every other cloud gaming service provider is a joke compared to Microsoft already, and this would tip the balance even more in their favour. Also, it is very difficult to get started in that industry so its more prone to monopolies anyway. The argument is basically that as cloud gaming is a growing market in which Microsoft already has a huge advantage, giving them a further advantage would stop other services from coming up and prevent growth.

As for why the UK might be different (and IIRC the EU raised the same concerns) to the US regarding cloud gaming, this is just pure speculation but I guess the lack of data caps and mostly faster internet make cloud gaming a more serious proposal in Europe.

cloud gaming is the funniest reason and makes me wonder if they have an agenda. it's not like Activision is a major provider of cloud services.

transience posted...

it's not like Activision is a major provider of cloud services.

This is what gave me pause in this discussion. If it was EA or Ubisoft, okay maybe.

Who knew Stadia dying would probably end up hurting Microsoft more

The rationale is not that Activision are a potential provider of cloud gaming being removed, but that Microsoft buying Activision will make them even more dominant in a space they already have a huge advantage in.

LiquidOshawott posted...

Who knew Stadia dying would probably end up hurting Microsoft more

Yep. Honestly its kind of a shame, I used Stadia a bit a couple of years ago and it was great. Just an example of having the tech down but completely bungling the business side.

got'em

LightningStrikes posted...

The rationale is not that Activision are a potential provider of cloud gaming being removed, but that Microsoft buying Activision will make them even more dominant in a space they already have a huge advantage in.

But if Activision is not a potential provider what meaningful advantage are they gaining by acquiring them.

At that point you might as well ban Microsoft from acquiring anyone as you can argue they'll gain a benefit to their cloud gaming by increased revenues allowing them to invest more into cloud gaming.

Definitely think there's some secondary agenda there.

Its basically the same argument Sony was trying to make about consoles applied to a market where Microsoft isnt a distant third. That is the difference, this would not be sufficiently damaging to the console business but cloud gaming is a different story because Microsoft has a much, much bigger market share there.

As for a secondary agenda I suspect it would simply be blocking a merger of this size. The CMA is more active than say the FTC and will intervene from time to time like when they blocked the Asda/Sainsburys merger a few years ago.

I guess the argument would be that Game Pass gets more powerful by putting Activision games on their service, but even Sony has built up a decent GP competitor in the last year. I just don't get the angle.

but, I also don't mind regulators stopping giants from merging on principle so this doesn't really bother me either way. it just seems disingenuous.

transience posted...

even Sony has built up a decent GP competitor in the last year.

Can you even stream PS4 games? I thought it was just PS3.

pretty sure you can, but I think you need Premium and not just Extra?

MacArrowny posted...

Can you even stream PS4 games? I thought it was just PS3.

Nah, it's PS4 as well. Have to have PS+++ for any of it.

Ah, gotcha. Guess the issue would be low subscriber numbers for Sony then? I think ++ only had a couple million in the latest financials.

Lopen posted...

At that point you might as well ban Microsoft from acquiring anyone as you can argue they'll gain a benefit to their cloud gaming by increased revenues allowing them to invest more into cloud gaming.

That's basically what they've decided

If the exclusivity of Activision games was the deal breaker then they could enforce non-exclusivity, which they already promised for like 10 years I think? Still a weird thing to enforce but it's more justifiable.

I still can't believe data caps on home internet exist anywhere. It's outrageous.

I think data caps are mostly a Canada/America thing? Haven't heard about other countries having them. Maybe Russia, since its population density is low?

Man, this acquisition thing has been in talks for how long now

Microsoft should acquire the UK first.

I suspect it will still happen.

ChaosTonyV4 posted...

I suspect it will still happen.

They're appealing the process, but apparently the CMA practically never changes their minds.

I thought the CMA approved this a month ago. What was that about?

Im probably being dumb, but arent they both American companies? What level of presence in the UK subjects them to UK antitrust regulation? Having offices there, just selling their products there, or what?

LordoftheMorons posted...

selling their products there

this part

Activision has multiple divisions in the UK though, and I'd guess MS has some major operations there too.

Got it, thanks

What I don't get is how does the UK have any control over what two American companies do. If the US does allow the merger and they merge, what are they going to do? Fine them? I think MS can handle that. Ban all Microsoft products? I don't think the UK can handle that. Force the closure of their UK divisions? Yeah, the current administration needs a new controversy like a hole in the head, and killing 15,000 jobs would not go over well for a party that sells itself on creating well paying jobs in the private sector.

barreldragon88 posted...

Man, this acquisition thing has been in talks for how long now

Merging two multi-billion dollar companies take years even when governments aren't trying to fight it, longer when they do.