The British Competition and Markets Authority (CMA) is hitting the breaks on Microsoft’s plan to acquire Activision Blizzard for $68.7 million. The decision comes after previous warnings from the regulating body that the deal could “substantially reduce” competition and “harm U.K. gamers.” The CMA is making its case a year after Microsoft and Activision Blizzard announced their merger plans. The CMA’s report projects that the deal would lead to “substantial lessening of competition” in cloud gaming services in the United Kingdom since Microsoft would likely find the financial benefit in keeping Activision Blizzard’s games exclusive to its services. This news comes after a report yesterday that Microsoft and Activision Blizzard were nearing finalization of the deal despite regulatory opposition.
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Activision CEO Bobby Kotick pushed back against the decision in a statement, where he seems to suggest the company could invest less in the UK market as a result. “The CMA’s report contradicts the ambitions of the UK to become an attractive country to build technology businesses,” Kotick writes in his statement. “We will work aggressively with Microsoft to reverse this on appeal. The report’s conclusions are a disservice to UK citizens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that – despite all its rhetoric – the UK is clearly closed for business.”
The Microsoft Activision Blizzard Deal Faces Opposition from Regulators and Competitors
The CMA’s report follows the Federal Trade Commission’s filing suit to block the merger, claiming it’d empower Microsoft to suppress competition in the gaming market. The suit cited Microsoft’s history of purchasing rivals, including its deal to buy ZeniMax, the parent company of Fallout and The Elder Scrolls developer Bethesda Softworks. Where Bethesda’s previous releases were multiplatform, Starfield, , the first game from Bethesda since Microsoft’s acquisition of ZeniMax, will be exclusive to Xbox and Microsoft Windows and available on Microsoft’s Xbox Game Pass streaming service upon release.
If Microsoft succeeds in buying Activision Blizzard, it’ll be the biggest acquisition in the company’s history. The deal would make Microsoft the third-largest gaming company by revenue, placing it behind Chinese company Tencent and console rival Sony. The deals would make Microsoft, who owns Halo in addition to Bethesda’s intellectual property, the home of several more of the biggest franchises in gaming, including Call of Duty. Sony has been outspoken about its opposition to the merger.
