Trusted Reviews is supported by its audience. If you purchase through links on our site, we may earn a commission.Learn more.
The CMA is right to block the Microsoft and Activision deal
In This Article
OPINION: Today, the CMA (Competition and Markets Authority)announcedthat it will be blocking Microsoft’s deal to acquire Activision Blizzard. This means that, pending any appeals, the likes of Call of Duty and Diablo are unlikely to become Xbox exclusives after all.
This will no doubt be a controversial decision with Xbox fans who have suggested that Microsoft doesn’t have a significant advantage over brands such as PlayStation, but I personally think the CMA was correct to block Microsoft’s deal with Activision, especially since the CMA has highlighted the cloud gaming market as its chief concern.
It’s easy to make the argument that Xbox isn’t the competition leader when it comes to consoles. ThePS5has stronger sales than theXbox Series Xafter all. You could make the argument that Microsoft has the upper hand for the long-term future following the acquisition of Bethesda, with exclusive rights for games such The Elder Scrolls, Doom and Fallout likely to have an impact on future console sales, but it’s all ifs and buts at this point.
We remain fully committed to our acquisition with@ATVI_ABand will appeal today’s determination by the CMA. Here’s our statement.pic.twitter.com/ylvDP5RUqQ
There’s absolutely no question that Microsoft is the competition leader for cloud gaming via Game Pass. TheCMA reportsthat Microsoft “already accounts for an estimated 60-70% of global cloud gaming services.”
Back in 2022,Microsoft revealed that there were over 25 million Game Pass subscribers. Microsoft hasn’t provided an updated figure since then, but has cited growth, so the current subscriber count is likely even higher.
It’s also important to remember that Microsoft owns Windows and Azure (a global cloud computing infrastructure) and so it has a key advantage over any competitors that wish to challenge Game Pass.
There isn’t any other cloud-streaming service that comes close to the popularity of Game Pass either.Nvidia’s GeForce Nowis a notable competitor, which has over 20 million users (as of 2022) but the key difference here is that GeForce Now has a free tier and doesn’t offer up a game library as part of the subscription like Game Pass.
To find a cloud streaming service with a similar model to Game Pass, you’d have to look at eitherAmazon Luna(which only recently expanded outside of the US) or the now defunct Google Stadiawhich only had 2 million active usersin February 2022.
Microsoft is already in a position of strength when it comes to cloud gaming, and acquiring Activision Blizzard would only strengthen its position at the top.Call of Duty: Modern Warfare 2was thehighest selling game of 2022 in the US, andsecond highest selling game in the UK, only behindFIFA 23.
If Call of Duty were to become a Game Pass exclusive, it’s difficult to imagine any other company being able to compete with Microsoft. Even Amazon and Google, two of the biggest tech companies in the world, struggled to compete, and that’s forgetting the many other popular games under the Activision Blizzard umbrella. Other major franchises include Overwatch, Crash Bandicoot, World of Warcraft and more.
Many may argue that having all of these different game franchises packaged into a single cloud-streaming subscription would actually provide better value for individual gamers – Game Pass is a lot more affordable than buying multiple games each year.
As theCMA points outhowever, Microsoft would have the incentive to increase the cost of Game Pass following an acquisition of Activision, and with no serious competitor, Microsoft doesn’t really have to worry about gamers looking elsewhere for cloud streaming. It could hike up its prices as high as it wanted without consequence.
Chair of the independent panel of experts conducting the CMA’s investigation, Martin Coleman, said: “Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming and this deal would strengthen that advantage giving it the ability to undermine new and innovative competitors.”
It’s difficult to argue with that. The intense rivalry between PlayStation and Xbox has fuelled plenty of innovation over the years, from a greater push in improving the quality of first-party games to bleeding-edge hardware. The existence of both a PlayStation and Xbox has also helped to keep the price of the consoles more affordable, undercutting the cost of similar-specced PCs by a significant margin.
It’s important that Xbox has that level of competition for its cloud-streaming service too, but right now, no other service comes close to Game Pass and as controversial as the decision may be, I believe it’s correct for the CMA to protect competition for the emerging cloud-streaming market.
You might like…
Formerly the Staff Writer at Stuff Magazine, Ryan’s been writing about tech since he graduated from Cardiff University. At Trusted Reviews he is focused on everything computer-related, giving him a va…
Founded in 2003, Trusted Reviews exists to give our readers thorough, unbiased and independent advice on what to buy.
Today, we have millions of users a month from around the world, and assess more than 1,000 products a year.
Editorial independence means being able to give an unbiased verdict about a product or company, with the avoidance of conflicts of interest. To ensure this is possible, every member of the editorial staff follows a clear code of conduct.
We also expect our journalists to follow clear ethical standards in their work. Our staff members must strive for honesty and accuracy in everything they do. We follow the IPSO Editors’ code of practice to underpin these standards.
Why trust our journalism?
Founded in 2003, Trusted Reviews exists to give our readers thorough, unbiased and independent advice on what to buy.
Today, we have millions of users a month from around the world, and assess more than 1,000 products a year.
Editorial independence means being able to give an unbiased verdict about a product or company, with the avoidance of conflicts of interest. To ensure this is possible, every member of the editorial staff follows a clear code of conduct.
We also expect our journalists to follow clear ethical standards in their work. Our staff members must strive for honesty and accuracy in everything they do. We follow the IPSO Editors’ code of practice to underpin these standards.
