UK's regulatory body have today released their final decision regarding Microsoft's proposed acquisition of Activision Blizzard, blocking the deal over cloud concerns.
CMA UK have officially blocked Microsoft's acquisition of Activision Blizzard King . The UK regulatory body have today released their final report, in which they state that Microsoft's proposed purchase of Activision would "alter the future of the fast-growing cloud gaming market" which could lead to "reduced innovation and less choice for UK gamers over the years to come."
CMA explain that Microsoft "failed to effectively address the concerns in the cloud gaming sector", which is something that CMA mentioned in provisional findings published in February.
"The CMA launched an in-depth review of the deal in September 2022, and in February 2023 provisionally found that the merger could make Microsoft even stronger in cloud gaming, stifling competition in this growing market," it's stated in the report.
The main issue with the merger, at least in CMA's opinion is with the cloud gaming space, which is a bit surprising given that cloud is still a minor part of the industry, with consoles and mobile leading the way.
Microsoft have already issued a comment, confirming that they will appeal the decision. Additionally, Activision Blizzard's Lulu Cheng Meservey tweeted that the CMA's decision is "a major setback for the UK's ambitions to be a tech hub".
"We will work with Microsoft to reverse it on appeal. This report is also a disservice to UK citizens, who face increasingly dire economic prospects, and we will need to reassess our growth strategy in the UK," she tweeted shortly after the decision was published. "Global innovators large and small will take note that - despite all its rhetoric - the UK is closed for business."
Screengrab/Twitter
So, what's next for the deal? Well, Microsoft will appeal but given that the deal must be closed by July 18 they will have to renegotiate terms with Activision Blizzard which some shareholders may not be willing to do.
What happens if CMA stand by their decision after the appeal? Well, Microsoft can walk away from the deal or leave the UK market but we doubt the latter will happen.
All in all, we'll have even more Microsoft Activision Blizzard talk over the next couple of months, which is truly devastating news here. Just when we thought it was all coming to an end.
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