Activision Blizzard (ATVI) has officially filed a motion to intervene to appeal the decision by the UK Competition and Marketing Authority (CMA) to block the company's acquisition by Microsoft. This follows Microsoft’s own appeal filed last week.
Both companies recently hired their own top legal representatives to handle the appeals process, which both are now contesting. This goes to the UK’s Competition Appeal Tribunal. The appeals process will analyze whether the CMA properly arrived at its determination. With the appeals, they are pointing out what they say are holes in the determination, and that the CMAs determination was flawed for a number of reasons.
The only original anticompetitive concern that resulted in the rejection was over cloud gaming. Rejecting the entire deal based on cloud gaming is short-sighted, according to the appeals, for a number of reasons. One, cloud gaming represents a very small percentage of the market, including revenue. In addition, to play via a cloud streaming platform, you will need to purchase the game from an official distributor. You might buy the game on Steam and then use your Nvidia GeForce NOW subscription to play it.
An official statement from ATVI on the process focuses on what the company sees as errors in the process and a misunderstanding of the market. “The CMA’s decision ignores the facts, the law, and all commercial reality. We’re looking forward to working with MSFT to get this deeply flawed decision reversed.”
In a recent report by GamesIndustry.biz, they calculated that cloud gaming will still only represent about 6% of customer spending by 2026.
The CMA’s determination that anti-competitive concerns didn't apply to market dominant console gaming, but to cloud gaming, was a miscalculation, according to the appeal. Microsoft's numerous 10-year signed contracts with a number of companies offering Activision games to their platforms, including cloud services, were also in place, and they say, disregarded.
The EU European Commission recently approved the merger, stating that cloud gaming could grow as a result, and as a reflection of Microsoft's promises and those signed deals.
There is a bright spot for the companies today, as South Korea approved the acquisition deal.
