UK Regulators Block Microsoft’s Acquisition of Activision Blizzard
In a shocking turn of events, British regulators have blocked Microsoft’s $69 billion deal to acquire Activision Blizzard. The Competition and Markets Authority issued a final report on Wednesday, stating that the merger would result in a significant loss of competition in the cloud gaming market, and the only solution would be to prohibit the merger entirely.
Concerns Over Market Consolidation
The decision by the UK regulator was based on concerns that the acquisition would stifle competition in the gaming industry. If the merger had gone through, Microsoft would have gained control over some of the world’s most popular game franchises like Call of Duty, and this would have given the tech giant a massive advantage in the cloud gaming market.
Microsoft Not Ready to Give Up
Upon hearing the news, Microsoft expressed its disappointment, saying it was not ready to give up on the deal. The company plans to appeal the decision, stating that it was a missed opportunity to tackle competition concerns pragmatically. Microsoft argued that the UK watchdog’s decision discourages technological innovation and investment in the country.
“We remain fully committed to this acquisition and will appeal,” said Chairman Brad Smith. “We are especially disappointed that, after lengthy deliberation, this decision appears to reflect a misunderstanding of this market and the way the relevant cloud technology actually works.”
Activision Blizzard also expressed its frustration and said it would work aggressively with Microsoft to overturn the decision on appeal.
Scrutiny from Rival Sony and Regulators in the US and Europe
Microsoft’s acquisition of Activision Blizzard also faces challenges from rival Sony, and regulators in the US and Europe who are concerned about market consolidation in the gaming industry. Sony is ramping up its efforts to compete with Microsoft, especially in cloud gaming, but Microsoft remains a significant player in the industry.
The decision by British regulators to block Microsoft’s acquisition of Activision Blizzard is a blow to the tech giant’s ambitions in the gaming industry. The competition concerns raised by regulators are valid, and it remains to be seen how Microsoft will react to this setback. The company has already indicated that it plans to appeal the decision, and it remains to be seen whether it will be successful or not. As per information from the source, the decision by the UK regulator has highlighted the challenges of a consolidating gaming industry and the need to maintain fair competition.