The UK’s Competition And Markets Authority Blocks Microsoft’s Proposed Purchase Of Activision Blizzard

Despite all previous signs to the contrary, the UK’s Competition and Markets Authority has decided to block Microsoft’s purchase of Activision Blizzard. This news comes a month after the seemingly good (for Microsoft) news that the CMA had decreased the scope of its investigation and noted that it wouldn’t hurt competition in console gaming. (Effectively, they didn’t feel that Sony’s concerns about Call of Duty held up.) But, while we were all taking that as a good sign, it seems that the CMA simply shifted its focus to another area – cloud gaming.

As the CMA notes in a press release published this morning, cloud gaming is growing fast in the UK, having more than tripled in the last two years. It predicts the market will be bringing in billions by 2026. The organization also notes that Microsoft already owns a bulk of the cloud gaming market, somewhere between 60% and 70%, and that allowing them to purchase Activision Blizzard will just increase their advantage in the market. It also predicted that without merging, Activision would eventually get in on the cloud gaming market itself – with games like Call of Duty, Overwatch, and World of Warcraft, so it seems that the CoD issue was kind of an issue after all.

Microsoft did provide the CMA with a plan to address its concerns. However, the organization found “a number of significant shortcomings” when it came to addressing cloud gaming services specifically. The CMA also noted that were they to accept Microsoft’s proposals, the organization would actually have to exert some regulatory oversight to make sure things were up to par. But, simply blocking the merger would just let things continue as is without the organization having to do anything.

Microsoft and Activision Blizzard have stated that they will appeal the decision with a Spokesperson going a bit further in reiterating the appeal plans by saying the decision will cause the companies to "reassess our growth plans for the U.K. Global innovators large and small will take note that - despite all its rhetoric - the U.K. is clearly closed for business.”

Bobby Kotick also decared that this wouldn't be the final word on the merger via an email released to the public saying, "We’ll keep pressing our case, because we know that this merger will benefit our employees, the broader U.K. tech workforce, and players around the world."

It's important to remember that should the deal fall through, Microsoft will still have to pay a $2.27 billion termination fee.