The UK’s Competition and Markets Authority has blocked Microsoft’s proposed acquisition of video game publisher Activision Blizzard. Microsoft’s bid valued at $69 billion was considered one of the largest deals the gaming industry has ever seen.
The reason behind the CMA’s decision is their concerns over cloud gaming. Microsoft’s cloud gaming service Azure is the backbone of its business and it continues to invest heavily in the growth of the platform. The watchdog stated that the acquisition would give Microsoft an “unfair competitive advantage” by having access to Activision Blizzard’s Call of Duty franchise and therefore having the potential to monopolize the gaming industry.
The news comes as a big blow for Microsoft, which was close to finalizing the deal. The company expressed its disappointment in the ruling and stated that they would look for alternative options to expand their cloud gaming platform. Microsoft’s CEO Satya Nadella stated, “Despite this setback, we remain committed to delivering the best gaming experience to players around the world.”
Many experts have shown their support for the CMA’s decision, stating that monopolies in any industry can be harmful for competition and consumers. Analysts suggest that this could motivate Microsoft to consider other acquisitions in the gaming industry or focus more heavily on creating original content for Azure.
This ruling is a reminder for big tech giants that acquiring companies may not be as easy as they think. Microsoft’s ambitious plan to rule the gaming industry has been thwarted by regulators concerned about the power of monopolies. This ruling is anticipated to have a domino effect in other countries where the deal was awaiting approval.
According to industry experts, Microsoft is likely to challenge the CMA’s decision, but it is unlikely to succeed. This would force Microsoft to consider alternative ways to gain a foothold in the gaming industry.