Microsoft’s $68.7BN deal for games giant Activision Blizzard has been blocked by regulators in the UK.
Both companies hit out at the Competition and Markets Authority (CMA), which ruled the proposed takeover would “alter the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.”
“The CMA’s report contradicts the ambitions of the UK to become an attractive country to build technology businesses,” an Activision spokesperson told the BBC.
Microsoft Activision Deal Could Bring Harm To UK Gaming Community, Rules Regulator
“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” added Brad Smith, the Vice Chairman and President of Microsoft.
The CMA had outlined its issues with the deal in February and said today’s final, binding ruling came after “Microsoft’s proposed solution failed to effectively address the concerns in the cloud gaming sector.” It claimed the proposal would need “some degree of regulatory oversight” but “preventing the merger would effectively allow market forces to continue to operate and shape the development of cloud gaming.”
The regulator had launched an in-depth review of the merger back in September 2022 after Microsoft struck its megabucks deal to acquire the Call of Duty franchise creator in January.
The CMA claims Microsoft owns up to 70% of the global cloud gaming services market already and has “other important strengths” in the area from owning Xbox, the Windows PC operating system and a global cloud computing infrastructure through Azure and Xbox Cloud Gaming.
“The deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft,” said the CMA in its ruling. “The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future.”
The UK has around 45 million gamers.
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