In yet another effort to try to assuage the suspicions of the UK‘s antitrust regulator, the Competition and Markets Authority (CMA), Microsoft has signed a 10-year deal with Nware to license Xbox and Activision Blizzard.
What happened?
- The agreement comes after the CMA blocked the purchase of Activision by Microsoft;
- The merger was blocked due to the regulator believing that the deal could create a monopoly and harm the cloud gaming market;
- The CMA noted that Microsoft already controls a 60% to 70% share of the segment and adding control over popular titles such as Call of Duty would give the company a significant advantage, substantially weakening competition.
While it’s still early days for the emerging segment of cloud gaming, this new partnership combined with our other recent commitments will make more popular games available on more cloud game streaming services than currently exists.
Brad Smith, President of Microsoft.
The Xbox owner has also signed similar deals with Nintendo, Nvidia, Valve Corp, and Boosteroid. The aim is to guarantee access, mainly, to the Call of Duty franchise, one of the most important and valued (and which is owned by Activision).
The same proposal was made to Sony, owner of the PlayStation and the most critical of the merger of companies. The company has not yet reached an agreement with the rival.
The deal between Microsoft and Activision is the biggest involving tech companies that the CMA has ever blocked. The body responsible for fair competition in Europe will decide on the deal by May 22. Microsoft said it will appeal the decision.
Dissatisfied, Microsoft rebuts the block
After the news of the blocking of the negotiation, Smith gave an interview to the BBC in which he showed great disappointment with the refusal. The chairman of Microsoft declared that the regulatory body’s actions “shattered confidence in the UK technology industry”.
In response to the CEO’s discontent, the chief executive of the CMA, Sarah Cardell, reinforced the decision and clarified that the regulator’s role is to ensure a competitive environment for companies to grow and prosper.
She also added that the considerations that resulted in the decision are also the same as those of the US Federal Trade Commission, suggesting that the US country should also block the merger.
With information from Reuters
