In April 2023, the UK Competition and Markets Authority blocked Microsoft's plan to acquire Activision Blizzard, claiming that such a transaction would reduce competition in the small but growing field of cloud gaming. At the time, Microsoft President Brad Smith gave an interview to the BBC and called the CMA's decision "bad for the UK," adding: "…The EU is a more attractive place to start a business than the UK."
However, Microsoft decided to make some changes to its deal with Activision Blizzard, which led to the CMA approving the agreement and Microsoft finally completing its acquisition of the game publisher. Now, Smith has suggested in a new interview with the BBC that rejecting the deal initially might have been a good thing.
Smith now says that when the CMA initially blocked the deal it was"Both severe and fair". He added:
It prompted Microsoft to change our proposed acquisition plan and let Activision Blizzard spin off certain rights in cloud gaming that CMA was concerned about.
Smith was referring to Microsoft's decision to hand over cloud publishing rights to Ubisoft's current and future Activision Blizzard games over the next 15 years. Smith said the CMA's approval of the revised deal "vindicated its position", adding: "I think it's good for everyone."
Although Microsoft completed its acquisition of Activision Blizzard in the fall of 2023, the company is still fighting with the U.S. Federal Trade Commission, which claims that the acquisition still poses a "competitive threat" to the video game industry. In December 2023, Microsoft and the FTC filed arguments for and against the deal with the U.S. Court of Appeals for the Ninth Circuit in San Francisco, and it could be months before we get a ruling from the appeals court.