The UK blocked Microsoft from buying Activision Blizzard in a bid to protect competition in the growing cloud gaming market. But in a bit of irony, a pair of cloud gaming providers, including Nvidia, are advocating for the deal to go through, saying it’ll be a boon to their platforms.
On Thursday, Nvidia tweeted its support for Microsoft from its GeForce Now account. "GeForce Now and other cloud gaming providers stand to gain an even deeper catalog of games if Microsoft’s acquisition of Activision is completed,” the company wrote. “We see this as a benefit to cloud gaming and hope for a positive resolution.”
Another cloud gaming provider, Ukraine-based Boosteroid, also threw in its support behind Microsoft. “Boosteroid team and our users disagree with the CMA's (the UK’s Competition and Markets Authority’s) decision against Microsoft's purchase of Activision,” the company wrote in its own tweet. “We hope for a quick resolution to this question.”
The companies issued the support likely because Nvidia and Boosteroid have inked agreements that'll let them benefit from Microsoft’s proposed takeover of Activision Blizzard. Earlier this year, Microsoft signed 10-year deals to bring its games and Activision Blizzard titles to both GeForce Now and Boosteroid. But the agreements can only reach their full potential if regulators clear Microsoft’s bid to buy Activision.
On Friday, Microsoft went ahead and signed a new 10-year-deal with another cloud gaming provider, despite the UK’s CMA declaring it would block the proposed acquisition. This time, Microsoft entered a partnership with Nware, a cloud gaming provider in Europe.
The software giant has been striking deals with other gaming companies, including Nintendo, to reassure world regulators that the Microsoft-Activision deal won’t harm competition. But the UK’s CMA disagrees, citing Redmond’s growing control in the emerging cloud gaming space.
“Microsoft already has important advantages in this market: it owns Windows, by far the leading PC operating system on which most PC games run; it has a global cloud infrastructure; and it has a strong gaming console and collection of games,” said CMA CEO Sarah Cardell. “No other cloud gaming operator has this combination of advantages, which partly explains Microsoft’s current UK market share of between 60-70%.”
Thus, the CMA fears Microsoft would eventually have the incentive to make games exclusive to its own cloud gaming platforms, such as Xbox Game Pass. Microsoft’s deals with other cloud gaming companies also wasn’t enough to reassure UK regulators. “Moreover, implementing the ineffective remedy would have replaced market forces with ongoing regulatory obligations overseen by the CMA, when competitive forces in a free market are much better placed to achieve the right outcome,” Cardell added.
Microsoft plans on appealing the CMA’s decision. But in the meantime, the UK regulator told the BBC: “Activision is intertwined through different markets—it can't be separated for the UK. So this decision blocks the deal from happening globally."
In the meantime, the US Federal Trade Commission has sued to stop the deal. The European Union, on the other hand, is expected to announce a decision on the acquisition next month.
