Will the Microsoft Activision acquisition be blocked by CMA after FTC's injunction is dismissed?

Microsoft's Activision deal was approved by the American federal court earlier today. However, this doesn't mark the end of disputes surrounding it. The British Competition and Markets Authority (CMA) has also tried to block the deal like the US Federal Trade Commission (FTC). However, unlike market monopoly and competitor analysis, the CMA's main concern is cloud gaming.

Microsoft and the British non-ministerial organization are scheduled to meet for a final decision from the court on July 24. The $68.7 billion deal will begin procedure from the first week of July. If the company fails to meet the rules and regulations in the UK, all future Xbox products might be locked out of the region.

Thus, it is paramount for the Redmond-based tech juggernaut to negotiate a deal with the CMA to allow the acquisition to proceed without further hiccups. That is exactly what Microsoft is focusing on from here on.

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What are the CMA's concerns regarding the Microsoft-Activision deal?

The British CMA has expressed concerns regarding Microsoft's grappling control on the cloud streaming market. The company bundles the feature with Game Pass Ultimate, a $17 monthly subscription.

The CMA has expressed concerns that Microsoft owns nearly every game that can be cloud-streamed today. Adding Activision's library (notably Call of Duty, Overwatch, and World of Warcraft) will expand this library to a point where cloud streaming would become a Microsoft monopoly.

The major argument put forward by the government organization is that Fortnite is the only game that can be streamed without a Game Pass subscription. Other competitors like Geforce Now are nowhere as big to compete against Microsoft.

Now, let's rewind to look at what Microsoft executive Sarah Bond, vice president of Xbox, said about cloud streaming at the FTC trial:

"xCloud as part of GPU (Game Pass Unlimited) is being used more as a feature. Instead of waiting for the download of a game, you can start playing right away via streaming. Majority of usage is like that."

However, this argument might prove futile in the United Kingdom as the CMA came cracking down on the Activision deal with a major focus on cloud gaming. The British authorities are not considering the competition, Sony, and the deal's impact on major franchises like Call of Duty.

Microsoft and the CMA have agreed to stop the court jurisdictions and work out a deal. The FTC ruling and the Chinese approval are massive votes of confidence in Microsoft's favor. We'll have to wait and see how the story further unfolds.