UK blocks Microsoft’s $69 billion Activision deal over Cloud Gaming Concerns

New Delhi (India), 27th April 2023: Amid worries that deal would hinder competition in the quickly expanding cloud gaming business, British regulators have blocked Microsoft’s $69 billion acquisition of “Call of Duty” developer Activision Blizzard.

The all-cash agreement, one of the largest tech acquisitions in history, was also closely reviewed by regulators in the US and Europe and met with fierce opposition from rival Sony.

According to a report by the Competition and Markets Authority, “the only effective remedy” for the significant loss of competition “is to prohibit the merger”.

Fears that Microsoft might gain ownership of well-known video gaming franchises like Call of Duty, World of Warcraft, and Candy Crush arose from the merger. However, Microsoft claimed in a statement that it remained fully committed to this acquisition and the firms promised to appeal the decision.

Activision, meanwhile, promised to “work aggressively” with Microsoft to undo it. Although it was not “the news we wanted,” CEO Bobby Kotick assured colleagues that it was far from the end of the deal. Following the news’s release, Activision Blizzard saw a 10.1% decline in pre-market trading.

Microsoft is set to lose about $3 billion as break up fee, if the deal is blocked. Brad Smith, Vice Chair and President of Microsoft said, “The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK.”