Microsoft’s $68 billion acquisition of video game giant Activision Blizzard has been blocked by the U.K.’s antitrust regulator, the Competition and Markets Authority (CMA). The CMA found that Microsoft’s ownership of Activision Blizzard could harm competition in the gaming industry.

One of the main concerns raised by the CMA is the potential for Microsoft to use its control over Activision Blizzard to dominate the cloud gaming market. Cloud gaming allows players to stream games on their devices, without needing expensive gaming hardware. Microsoft has been investing heavily in cloud gaming through its Xbox division, and some worry that if it also owns one of the biggest game developers, it could block other companies from competing in the space.

Microsoft disputes these claims, arguing that the deal would bring benefits to the gaming industry as a whole. In a statement, the company said: "We are disappointed by this decision, which we believe is misguided and based on an incorrect understanding of the dynamics of the video game and cloud computing industries."

However, others in the industry agree with the CMA’s concerns. For example, David Bates, CEO of games developer Epic Games, has said: "Microsoft’s acquisition of Activision Blizzard would be a disaster for gamers, developers, and competition. This merger would eliminate one of the last remaining independent game studios in the world."

One real-life example of the potential harm caused by monopolies is seen with Amazon’s control over online retail. Amazon has been criticized for using its dominance to pressure smaller sellers to use its platform, effectively making it harder for new businesses to compete. Similarly, if Microsoft were to own Activision Blizzard and dominate the cloud gaming market, it could limit competition from other companies and prevent innovation in the industry.

Microsoft’s acquisition of Activision Blizzard was approved by other regulatory bodies, including the U.S. Federal Trade Commission, but was blocked in the U.K. due to specific concerns around cloud gaming and its potential impact on competition.

FAQ:

  1. What is the reason for Microsoft’s acquisition of Activision Blizzard being blocked in the U.K.?
  • The main concern raised by the CMA is the potential for Microsoft to use its control over Activision Blizzard to dominate the cloud gaming market, which could harm competition in the industry.

    1. What has been the reaction to the decision from other companies in the industry?
  • David Bates, CEO of games developer Epic Games, has criticized the merger and warned that it would be a disaster for gamers, developers, and competition.

    1. Can you provide an example of how monopolies can impact new businesses?
  • Amazon’s control over online retail has been criticized for using its dominance to pressure smaller sellers to use its platform, effectively making it harder for new businesses to compete.

    1. What other regulatory bodies have approved Microsoft’s acquisition of Activision Blizzard?
  • The U.S. Federal Trade Commission and the European Union’s antitrust regulator have approved the merger, but it was blocked in the U.K. due to specific concerns around cloud gaming and its potential impact on competition.

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