The CMA and Microsoft Share a Common View: Cloud Gaming is the Key | Opinion

Ultimately, the controversy surrounding Call of Duty was not the main issue. The real challenge to Microsoft's bid to acquire Activision Blizzard came from the company's own beliefs and logic. Microsoft firmly believes that cloud gaming is the future of the industry, and the UK's Competition and Markets Authority (CMA) blocked the acquisition based on this point, aiming to protect competition and innovation in a nascent market that both parties believe will dominate the business landscape in the future. If Microsoft had attempted to make a similar acquisition five or ten years ago, it would have likely passed regulatory scrutiny with minimal conditions. However, the conversation has shifted from the console market to cloud gaming, and Microsoft's proposed acquisition of Activision Blizzard would have given it a significant advantage in this emerging market. The CMA's ruling seeks to protect this market, arguing that Microsoft's dominance would lead to higher prices and stifle innovation. Microsoft's own statements and actions have created a Catch-22, as the company's willingness to pay a large sum for Activision Blizzard suggests that it believes the acquisition would give it a significant competitive advantage in the cloud gaming market. The CMA agrees, and its ruling is based on the belief that this market is the one that truly matters. While there are arguments on both sides, Microsoft's actions have likely fueled the regulator's distrust, and the company's attempts to address the CMA's concerns have been seen as PR stunts rather than genuine efforts to engage with the issues. The acquisition's massive financial scale has also raised concerns, with Microsoft offering to pay a sum significantly larger than the estimated annual value of the console games industry. Ultimately, the CMA's ruling is based on the belief that the cloud gaming market is the future, and that Microsoft's acquisition of Activision Blizzard would have distorted this market and damaged competition and innovation.