Activision CMA Ruling “Far from the Final Word” Says Kotick, Deal Unlikely to Close in 2023

Today Microsoft’s proposed $69 billion acquisition of Call of Duty publisher Activision Blizzard hit a serious, perhaps fatal, stumbling block today when the UK’s Competition and Markets Authority (CMA) ruled against the merger. While the CMA had previously indicated they didn’t think the deal would lead to significantly less competition in the console market, they did believe it would give Microsoft a significant edge in the emerging cloud gaming market, which is why they shut it down.

That said, the fight definitely isn’t over, with Activision CEO Bobby Kotick stating in an open letter that the CMA’s ruling is “far from the final word on this deal.” Kotick promised the decision will be appealed.

“Alongside Microsoft, we [at Activision Blizzard] can and will contest this decision, and we’ve already begun the work to appeal to the UK Competition Appeals Tribunal. We’re confident in our case because the facts are on our side: this deal is good for competition.”

So, what will this appeals process mean for the Activision Blizzard acquisition? Well, for starters, closing the deal this year is pretty much off the table now. Eurogamer spoke to gaming industry analyst Piers Harding-Rolls, who expect the appeals process to be a drawn out one.

“According to the Competition Appeal Tribunal site, straightforward cases are aimed to be dealt with within nine months. If the appeal is successful it is then returned to the CMA to review. This again will take some time.”

Now the big question — would Microsoft even have a chance of winning an appeal? Given Microsoft’s moves like putting their games on GeForce Now wasn’t enough to allay the CMA’s concerns about the cloud gaming market, it’s not clear what more they could offer. Handing-Rolls also points out that the CMA had historically won a “significant majority” of appealed cased. And, of course, the CMA is just one regulator Microsoft has to deal with – they also need to get this deal past the European Commission and US Federal Trade Commission, the latter of which has been particularly aggressive in its rhetoric.

What do you think? Is there still a chance the Activision Blizzard deal happens? Or is it time for Microsoft to cut bait on this endeavor?