The UK Competition and Markets Authority (CMA) blocked the Microsoft metaverse-related purchase of Activision Blizzard today. The giant company had been planning the acquisition since last year as a first step on its Metaverse-building journey. The move aims to address competition concerns, particularly in the cloud gaming marketplace. However, the decision has implications for the development of the virtual world. So, as Microsoft desperately tries to change CMA’s decision, the Web3 community can’t help but wonder what else the future holds for the metaverse.

Credit: Microsoft

Why Did the CMA Block Microsoft’s Purchase of Activision Blizzard?

The CMA’s decision to block the acquisition stems from concerns that Microsoft’s ownership of Activision Blizzard could harm competition in the cloud gaming market. To clarify, cloud gaming is also known as gaming on demand, gaming-as-a-service or game streaming. It is a type of online gaming that runs video games on remote servers. Then, it  streams them directly to a user’s device. So, users are playing a game remotely from a cloud.

CMA believes that Microsoft’s ownership of Blizzard could harm this market. The authority argues that Microsoft might leverage its position to exclusively release popular games (like Call of Duty) on its own Games Pass platform. This would, of course, be restricting competition. Additionally, the CMA worries that the acquisition could undermine innovation in the cloud gaming sector.

How Did Microsoft Respond?

Microsoft, disappointed by the CMA’s decision, aims to address competition concerns. It will do this by proposing cross-distribution agreements with rival publishers such as Sony, Nintendo, and Nvidia. These agreements would ensure that games like Call of Duty remain available on each company’s storefront. Therefore alleviating concerns about exclusivity. Furthermore, Microsoft Vice Chair and President Brad Smith expressed commitment to appealing the decision, emphasizing the potential negative impact on technological innovation and investment in the UK.

The Future of the Microsoft Metaverse

While the CMA’s decision primarily revolves around the gaming market, it also has implications for the development of the Metaverse. The acquisition of Activision Blizzard by Microsoft would have provided the necessary resources to create immersive experiences within the Metaverse.

The proposed acquisition aligned with Microsoft’s strategy to invest in high-quality content, community building, and cloud opportunities to develop immersive gaming platforms. Phil Spencer, CEO of Microsoft Gaming, emphasized the potential for gamers to play their favorite titles virtually anywhere they want. Finally, while Microsoft plans to appeal the decision, the outcome may influence the future of gaming and virtual reality experiences.

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