Written By In a surprising move, the UK’s antitrust watchdog has blocked Microsoft’s proposed $69 billion acquisition of video game giant Activision Blizzard. The announcement came on Thursday, April 28, and represents a major blow to Microsoft’s plans to expand its gaming division.
The Competition and Markets Authority (CMA) said that the deal would give Microsoft too much control over the gaming industry, and could lead to higher prices for consumers. The regulator also expressed concern about the impact the deal could have on competition in the sector.
“Microsoft’s acquisition of Activision would have led to a substantial lessening of competition in the UK video game market, which could have resulted in higher prices, fewer quality releases, and less choice and innovation for UK gamers,” said CMA chief Andrea Coscelli in a statement.
The CMA’s decision follows an investigation into the proposed acquisition, which began in February. The regulator had initially raised concerns about the deal’s impact on competition in the gaming sector, and called on Microsoft to address these concerns.
However, Microsoft argued that the deal would actually increase competition in the gaming industry, as it would allow the company to compete more effectively with rivals such as Sony and Nintendo.
“We respectfully disagree with the CMA’s decision and will be appealing,” said Microsoft in a statement. “We believe the acquisition of Activision Blizzard will create a more vibrant and competitive gaming industry, with benefits for players and developers alike.”
Activision Blizzard is one of the world’s largest video game companies, known for popular titles such as Call of Duty, World of Warcraft, and Candy Crush. The company has been struggling in recent years, with declining revenues and criticism over its handling of workplace issues.
Microsoft’s proposed acquisition of Activision Blizzard was seen as a major move by the tech giant to expand its gaming division and compete more effectively with rivals such as Sony and Nintendo. The deal was announced in January, and was expected to be completed by the end of 2023.
The CMA’s decision to block the deal is a setback for Microsoft, which has been looking to grow its gaming business in recent years. The company has been investing heavily in its Xbox gaming platform, and has been acquiring other gaming companies such as Bethesda Softworks.
However, the decision is also a victory for those who have been critical of the deal, including some industry analysts and consumer groups. Critics have argued that the acquisition would have given Microsoft too much control over the gaming industry, and could have led to higher prices and less choice for consumers.
The CMA’s decision to block the deal is not the first time that Microsoft has faced antitrust concerns. The company was embroiled in a high-profile antitrust case in the late 1990s and early 2000s, which saw it accused of using its dominant position in the PC operating system market to stifle competition.
Overall, the CMA’s decision to block Microsoft’s proposed acquisition of Activision Blizzard represents a significant development in the gaming industry. It remains to be seen how Microsoft will respond to the decision, and what the implications will be for the wider gaming sector.
