Head of Xbox Phil Spencer called the Competition and Market Authority’s (CMA) decision to block Microsoft’s Activision-Blizzard acquisition “disappointing” while reiterating the company’s confidence in and commitment to closing the deal.
“The CMA decision was disappointing,” Spencer said on the Kinda Funny Xcast. “I’ve been talking to that group for coming up on a year. They’ve defined a market of cloud gaming that in my mind doesn’t really exist yet today, but they have a point of view that maybe we have a lead in a market that is just forming and that this content could somehow prohibit others from competing in that market.”
“They’ve defined a market of cloud gaming that in my mind doesn’t really exist yet today…”
Microsoft, as previously announced, is appealing the CMA decision. The company is simultaneously working to secure approval from the European Union and fighting a lawsuit against the United States Federal Trade Commission, which sued to block the acquisition in December. According to Spencer, Microsoft has secured nine of its fourteen desired regulatory approvals, including one from Japan’s Fair Trade Commission.
Providing a potential cushion for Xbox fans and Microsoft shareholders should the deal fall apart, Spencer said the Activision-Blizzard acquisition “is not our strategy, but it is an accelerant for our strategy.”
On April 26, the CMA announced its decision to prevent the acquisition, citing concerns about the cloud gaming market. “Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service,” it wrote in its decision. This, the CMA argues, “would risk undermining the innovation that is crucial to the development of [cloud gaming] opportunities.”
Two days after the CMA’s decision was announced, Microsoft signed a commitment with Nware to bring Xbox and Activision-Blizzard games to its cloud platform for the next decade. Microsoft, over the past few months, has struck similar deals with Nintendo, Nvidia, and other cloud services.
However, in its ruling, the CMA seemed unmoved by such deals, labeling them as “beavioural because they seek to regulate the behaviour of the businesses involved in a merger, requiring them to behave in a way which may be contrary to their commercial incentives. This therefore takes the form of a type of ongoing regulation of the sector, replacing market forces in a growing and dynamic market with mandated regulatory obligations ultimately overseen, and enforced by, the CMA — in this case at a global level.”
Elsewhere in the XCast interview, Spencer addressed the negative reception to Redfall: “There’s nothing that’s more difficult for me than disappointing the Xbox community, and just kind of watch the community lose confidence [and] be disappointed.”
In IGN’s Redfall review, Luke Reilly gave it a 4/10, calling Arkane’s shooter “a bafflingly bad time across the board.”
Microsoft will seek to turn things around next month with a Xbox Showcase and Starfield Direct double-feature on June 12. The showcase will include new game announcements from first- and third-party studios, while the Direct will feature “tons of new gameplay, developer interviews, and behind-the-scenes insider information” for Starfield.
Jordan covers games, shows, and movies as a freelance writer for IGN.
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