Various analysts have weighed in with their opinions after the CMA blocked the deal between Microsoft and Activision Blizzard. The decision was announced yesterday, and the basis of the block is the CMA's concern with regard to the growing market of cloud gaming. While Microsoft submitted a proposal in March to address the issues brought up, the independent panel of experts found these to be insufficient.According to the Competition and Markets Authority in the UK, Microsoft already has a considerable hold on the cloud gaming market with its Xbox Game Pass service. The CMA's belief is that the Activision Blizzard deal would just further strengthen Microsoft's position and a raise of its subscription fees would be inevitable to compensate for all the additional content. The public expected Call of Duty to be the biggest point of contention, however, Microsoft seemingly mitigated those fears with most predicting an announcement from the CMA that approved the deal. To base its block around cloud gaming was a surprise to most, though Microsoft and Activision are ready to appeal the decision.After the decision, various analysts have been asked to weigh in on whether this is the end of the deal or if there's still a chance Microsoft could win the Activision acquisition. Most of them were skeptical and predicted the appeal is going to take a long time, which will affect both the CMA's and the FTC's decision. Jennifer Rie, senior antitrust litigation analyst at Bloomberg, said the deal may "very well be dead." According to her the appeal may take years which will put a strain on the deal, considering it's already approaching its July deadline which will likely need an extension. At this point, Microsoft has been trying to complete this purchase for 15 months.
A smaller percentage of analysts, however, think the appeal could be solved very quickly and efficiently. Michael Pachter, analyst at Wedbush Securities, said all Microsoft needs to do is commit to not raising its subscription fees beyond the rate of inflation or keep all the Activision Blizzard games off its cloud-based gaming platform. According to him, this could make the appeal successful before the CMA and FTC come out with their decisions, which could make it likelier they'll also approve the deal. The downside of Pachter's analysis is actually himself. He has gained a negative reputation in the business, by seemingly always predicting the opposite of what's going to happen.
Whether a quick appeal or a long arduous one will come to pass, audiences will see in the coming months. Additionally, how the proceedings change business relations for Sony within the industry once the dust settles will also be important for gamers.
Source: Bloomberg