In January 2022, Microsoft announced its plan to acquire Activision for almost $69 billion USD, making it the largest acquisition in the history of the video gaming industry. However, the proposed plan has faced significant hurdles with regulatory bodies such as the Competition Markets Authority (CMA) launching an investigation of the takeover amid antitrust concerns.
Recent discussions have seen the CMA change its provisional findings and have narrowed their scope of the merger to the developing cloud gaming space. Platform competition expert, Joost Rietveld has been a prominent voice in the discussions, sharing his expertise with Microsoft and the regulatory bodies involved in the merger. As the CMA investigation draws to a close Joost has submitted a comment to the CMA explaining the limitations of the “cloud gaming theory of harm” as it can hold multiple definitions.
There is much ambiguity regarding whether cloud gaming should be considered a distinct market or not, and the CMA’s investigation on the blocking of the Microsoft acquisition hinges on this very question.
Joost explains we cannot consider a “distinct market” for cloud gaming service as it’s not possible to simply combine all cloud gaming services into a single market definition. Joost offers a typology of cloud gaming services, and proposes the four following categorisations, depending on the distinct type of cloud gaming service:
- cloud gaming as a feature (Xbox Game Pass)
- cloud gaming as a platform (Amazon Luna and Blacknut)
- cloud gaming as a complement (Nvidia’s GeForce Now and Boosteroid)
- cloud gaming as an input (Ubitus and GameStream)
Joost states that these four types of gaming services each rely on cloud streaming technology in different ways and that his four proposed definitions do not compete with each other due to their specialised offerings and differences in target users.
The CMA is set to schedule its final report the week of the 24 April, so head back here for the latest news.
UPDATED Media Apperancces as of CMA’s Decision to Block Microsoft’s Acquisition of Activision
On the 26 April the CMA released its final report and unexpectedly moved to block Microsoft’s proposed acquisition of Activision, Joost Rietveld has been sharing his thoughts with prominemt media outlets.