Xbox boss says the Activision deal got blocked over a cloud gaming market that "doesn't really exist yet"

 Warzone 2
Warzone 2

Xbox boss Phil Spencer says that the UK Competitions and Markets Authority's decision to block the Xbox Activision deal hinges on the body's definition of a cloud gaming market that "doesn't really exist yet."

"We remain confident," Spencer tells Kinda Funny, reiterating Microsoft's plan to appeal the CMA's block of the deal and its continued collaboration with the European Union and FTC. "I think there are like 14 jurisdictions all up we're working on approval. I think we have nine approvals so far," Spencer says.

"But the CMA decision was disappointing. I've been talking to that group for coming up on a year. They've defined a market of cloud gaming that in my mind doesn't really exist yet today. But they have a point of view that maybe we have a lead in a market that is just forming and that this content could somehow prohibit others from competing in that market. But we'll appeal. We'll stay on it. The company remains very, very committed. Activision Blizzard King is not our strategy, but it is an accelerant for our strategy, so we're still heads-down and working through regulatory."

The CMA specifically cited concerns over reduced competition in the cloud gaming market as a major driver in its decision to block the deal. Microsoft has signed a multitude of decade-long deals promising to put games on competing cloud services in a seeming effort to head off that line of concern, but it wasn't enough to convince the CMA.

A vast array of notable quotes from Spencer came out of today's interview, from his disappointment with the launch of Redfall to his assertion that great games alone won't reverse Xbox's problems.

There are still plenty of upcoming Xbox Series X games to look forward to.