The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future.

The deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft. Microsoft already accounts for an estimated 60-70% of global cloud gaming services and has other important strengths in cloud gaming from owning Xbox, the leading PC operating system (Windows) and a global cloud computing infrastructure (Azure and Xbox Cloud Gaming). Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service. By way of comparison, sales of recorded music in the UK in 2021 amounted to £1.1billion. It is forecast to be worth up to £11 billion globally and £1 billion in the UK by 2026. Monthly active users in the UK more than tripled from the start of 2021 to the end of 2022. The UK cloud gaming market is growing fast. The CMA launched an in-depth review of the deal in September 2022, and in February 2023 provisionally found that the merger could make Microsoft even stronger in cloud gaming, stifling competition in this growing market.

Microsoft entered into a $68.7 billion deal to buy Activision, one of the most popular video games publishers in the world, in January 2022. The final decision to prevent the deal comes after Microsoft’s proposed solution failed to effectively address the concerns in the cloud gaming sector, outlined in the Competition and Markets Authority’s (CMA) provisional findings published in February.

Panel Chair: “Cloud gaming needs a free, competitive market to drive innovation and choice”.Microsoft’s solution had significant shortcomings and would require regulatory oversight by CMA.

Pc xbox cloud gaming