UK blocks Microsoft’s deal to buy Activision Blizzard
Microsoft’s acquisition of Activision Blizzard has been blocked by the UK’s competition and market authority. The company has already appealed the decision.
In one of the biggest decisions in video games history, the regulatory board has said they are not going to allow the proposed $69 billion deal to go through. In a post on Gov.uk, the authority explained that it sees Microsoft’s strong position in the cloud gaming sector as the biggest issue for the deal.
It published: “Microsoft already accounts for an estimated 60-70% of global cloud gaming services and has other important strengths in cloud gaming from owning Xbox, the leading PC operating system (Windows) and a global cloud computing infrastructure (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. The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future.”
Microsoft has already responded saying it will appeal this decision. In a statement, the company said(via Bloomberg): We remain fully committed to this acquisition and will appeal. The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK.”
Activision has also responded, saying: “We will work aggressively with Microsoft to reverse this on appeal.”
It’s not currently clear what this means for the broader deal, as well as franchises like Call of Duty and Overwatch. It’s also not clear what this means for the status of this merger outside of the UK and how it will affect the discussion in other countries like the US.
However, as the appeal has already started, it’s clear that this saga is going to continue for the foreseeable future.