The UK’s Competition and Markets Authority (CMA) blocked Microsoft’s bid to buy US gaming firm Activision, leading Microsoft President Brad Smith to call it the company’s “darkest day” in the UK.
The CMA has blocked Microsoft’s proposed acquisition of US gaming firm Activision, a move that has been criticised by its President Brad Smith. Smith stated that the decision was “bad for Britain” and marks the company’s “darkest day” in the country.
The deal, worth $68.7bn, would have been the gaming industry’s biggest-ever takeover, and would have given the company control of popular games such as Call of Duty, Candy Crush, and World of Warcraft. However, the CMA’s decision means that the deal cannot go ahead globally.
Microsoft Expresses Disappointment in CMA’s Decision
In an interview with the BBC, Microsoft President Brad Smith expressed his disappointment with the CMA’s decision and stated that it was bad for Britain. He also claimed that the European Union is a more attractive place to start a business than the United Kingdom.
The CMA defended its decision, stating that it was important to support competition in the UK and that the country is open for business. The UK government also disagreed with Smith’s claims, pointing out that the UK games sector has doubled in size over the last 10 years.
The CMA’s ruling was based on concerns that the deal would hit innovation and give gamers less choice in the fast-growing cloud gaming market. Microsoft already has a 60-70% share of the cloud gaming market, and combining with Activision would really reinforce its strong position.
Both Microsoft and Activision have said they will appeal against the CMA’s decision. The deal needs to be approved by regulators in the UK, the US, and the EU. The US Federal Trade Commission began a legal challenge to block the takeover last year, and EU regulators delayed their decision in March after the tech company proposed concessions.
The company has stated that the decision may have an impact on its UK investment. Smith said that if the UK wants to bring in investment, then it needs to look hard at the role of the CMA and the regulatory structure.
Importance of the Activision Deal
For Microsoft, the merger with Activision is crucial as it envisions cloud gaming as the future of the gaming industry and aims to bolster its standing in the market. Additionally, the acquisition of Activision would provide Microsoft with the opportunity to gain access to highly sought-after gaming titles, empowering it to better compete with competitors like Sony.
Sony’s position is that if the deal went ahead, Microsoft would have an incentive to restrict access to Activision’s titles to PlayStation, which would be bad for gamers. The company’s bid for Activision has been blocked by the UK regulator due to concerns over the impact on innovation and choice in the fast-growing cloud gaming market. Microsoft and Activision plan to appeal against the decision.