Microsoft’s $68.7 billion deal for gaming giant Activision Blizzard has been blocked by UK regulators.
Both companies settled with the Competition and Markets Authority (CMA), which ruled that the proposed acquisition would “transform the fast-growing cloud gaming market and lead to less innovation and less choice for UK gamers in the coming years”.
“The CMA report goes against Britain’s ambitions to become an attractive country for the creation of technology companies,” an Activision spokesman told the BBC.
“The CMA’s decision throws off a pragmatic approach to addressing competition concerns and discourages technology innovation and investment in the UK,” added Brad Smith, Microsoft vice-chairman and president.
The CMA outlined its problems with the deal in February, saying that today’s final, binding decision came after “Microsoft’s proposed solution failed to effectively address concerns in the cloud gaming industry.” It claimed that the proposal would require “some level of regulatory oversight” but “preventing the merger would effectively allow market forces to continue and shape cloud gaming development”.
The regulator launched an in-depth merger review in September 2022 after Microsoft completed its Megabucks deal Duty franchisees in January.
The CMA claims that Microsoft already owns up to 70% of the global market for cloud gaming services and “other key strengths” in this space through its ownership of Xbox, the Windows PC operating system and a global cloud computing infrastructure through Azure and Xbox added cloud gaming.
“The transaction will strengthen Microsoft’s advantage in the market by giving it control over key game content such as Call of Duty, Overwatch and World of Warcraft,” the CMA said in its decision. “The evidence available to the CMA suggests that, absent the merger, Activision would be offering games via cloud platforms for the foreseeable future.”
Great Britain has around 45 million players.
Source: Deadline
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