Microsoft was dealt a blow by the UK’s Competition & Markets Authority this week when the agency said it would move to block the Xbox company’s $68.7 billion buyout of Activision Blizzard. The CMA’s major concern pertained to cloud gaming.
Microsoft has now signed yet another lengthy cloud gaming deal with a UK provider as the company prepares to appeal the CMA’s decision.
Microsoft president Brad Smith announced on Twitter that Microsoft and European cloud gaming platform Nware have agreed to a 10-year deal to stream PC games made by Xbox and Activision Blizzard to its platform, should the deal close. Smith also noted that “it’s still early for the emerging cloud segment in gaming,” but Microsoft is making the deal to help bring more games to more people through the cloud. In its own statement, Nware said it’s excited to be working with Microsoft on this partnership for cloud gaming in Europe.
Nware is a company that lets people stream games they own on Steam, Epic Games Stores, Ubisoft Connect through the cloud. For a membership that starts at $11/month, members can also play Roblox and Minecraft via the cloud using Nware.
Microsoft previously signed streaming commitments with companies like EE, Boosteroid, Ubitus, and GeForce Now to help convince regulators to approve the Activision Blizzard buyout. It didn’t work, though, at least not yet, as the CMA said Microsoft did not do enough to alleviate its concerns that Microsoft would hold too much power of the cloud gaming market in the UK.
Activision Blizzard CEO Bobby Kotick responded by saying cloud gaming is an “inconsequential” market for gaming right now. Smith, for his part, said the CMA’s decision was made on a faulty premise regarding the popularity of the cloud market. The CMA itself admitted that the cloud gaming segment of the wider video game industry remains in its “infancy.”
Microsoft and Activision Blizzard are working together to prepare an appeal to the CMA’s decision, but it remains to be seen how long that could take or if it would be effective. The European Union is expected to hand down its decision by May 22, and reports suggest the EU will approve the deal. Smith alluded to this previously, saying regulators in Brussels–the capital of the EU–have been open to having “more of a conversation” about the pending Activision Blizzard deal. Smith went on to say that the EU is a more attractive place to do business than the UK.
Back in America, the FTC is not expected to have its first hearing on the matter until August 2, 2023, so this could take a while.
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