the U.K. Competition and Markets Authority (CMA) announced its
final decision to prevent Microsoft’s proposed purchase of Activision
for $68.7B, citing that it would negatively impact the future of the
cloud gaming market, stifle innovation, and reduce choices for U.K.
gamers.
Now, several current and former investors at gaming-centered VC firms are weighing in on the move.
- Several VCs argue that U.K. regulators lack a complete understanding of cloud gaming and are focusing on the wrong issues.
- Josh Chapman, a managing partner at Denver-based Konvoy Ventures,
asserts that it “is a positive for the industry because it showcases
that big tech companies like Microsoft remain committed to gaming."
- CMA’s
top concern over the deal was the possibility of Microsoft gaining a
monopoly over cloud gaming, stating that the software giant “would find
it commercially beneficial to make Activision’s games exclusive to its
own cloud gaming service.” Despite this, many VCs believe that
consolidation in the gaming industry is beneficial. Erik Reynolds,
President and Founder of Aggregated Media,
voiced support for the deal, stating that the acquisition would provide
the gaming studio with a better safety net and more resources.
- Andrew Sheppard, managing director at Transcend Fund,
echoed a similar sentiment regarding consolidation, emphasizing that
“consumers want choice, but what they really care about is simplicity.”
- Reynolds
and other VCs say that the CMA’s decision could dissuade entrepreneurs
from starting a company in the U.K. and that the move behind it “feels
very political in nature."
