The sale of Activision Blizzard to Microsoft has hit a snag, with the UK’s Competition and Markets Authority (CMA) announcing that it wants to block the sale. Activision Blizzard CEO Bobby Kotick has spoken out against the CMA, describing its decision as “irrational.” Kotick believes that Activision Blizzard and Microsoft will appeal the CMA’s verdict, and that they will ultimately win the case.
The CMA’s Main Concerns
The CMA’s main concern regarding the sale is to do with cloud gaming. The organization believes that cloud gaming will be the biggest growth area in the industry in the coming years, and was therefore worried about Microsoft’s potential dominance of the market upon completion of the sale.
Kotick’s View on Cloud Gaming
Kotick, however, disagrees with the CMA’s conclusions. Speaking to Bloomberg TV, he described cloud gaming as “an inconsequential part of the business.” Kotick believes that the real action is in the mobile market, an area in which Microsoft has little presence. He therefore argues that allowing Microsoft to purchase Activision Blizzard would help the Xbox giant to enter the mobile business.
Microsoft’s Remedy Offer
Despite the CMA’s concerns about cloud gaming, Microsoft offered a remedy to help assuage those fears. The company signed a number of deals with UK telecommunications companies for cloud gaming, but this did not convince the CMA to allow the sale to go ahead.
Why Activision Blizzard Wants to Sell
Activision Blizzard is enjoying healthy profits at the moment, but Kotick still wants to sell the company to Microsoft in order to access the vast network of Microsoft developers and engineers working in the fields of artificial intelligence and data analytics. Kotick states that top talent is hard to come by these days, and selling to Microsoft would help Activision Blizzard to better compete and increase its revenue.
The Controversy Surrounding Kotick
Kotick has recently been involved in a number of controversies, including allegations that he covered up instances of sexual harassment at Activision Blizzard. Some reports have also suggested that Kotick threatened to kill someone.
What Happens Next?
The EU will announce its decision on the sale by May 22, while the US’s Federal Trade Commission will hold its first evidentiary hearing in August. It seems that this case will continue for some time, as both Activision Blizzard and Microsoft are determined to appeal the CMA’s verdict.
In conclusion, while the CMA may be concerned about Microsoft’s potential dominance of the cloud gaming market, Kotick and Microsoft believe there is more action in the mobile gaming arena, an area in which Microsoft currently lacks a significant presence. They believe that the sale of Activision Blizzard to Microsoft will benefit both parties, and intend to fight the CMA’s verdict in the EU and via an appeal.
