$69B Microsoft merger with Activision video game company blocked by UK regulators

Video game - Major Merger Stopped

A number of other countries have also moved to block the merger in recent months.

Microsoft’s $69 billion acquisition of video game maker Activision Blizzard has been blocked by regulators in the UK.

This move has halted what would have been the largest tech deal in history.

The UK regulators, the Competition and Markets Authority, agreed with those from several other countries worldwide that were concerned that a merger between Microsoft and the Activision Blizzard video game company would shrink competition in the rapidly growing cloud gaming market.

Video game - Competition Knock out

In the Competition and Markets Authority’s final report on the matter, it stated that “the only effective remedy” to the massive reduction of competition “is to prohibit the merger.” That said, both companies have already stated that they intend to appeal the decision.

Microsoft stated that it was disappointed in the decision and didn’t have any intention of giving up on the deal.

“We remain fully committed to this acquisition and will appeal,” said company president Brad Smith. He added that he felt the regulator’s decision “rejects a pragmatic path to address competition concerns” and risks holding back technological innovation and investment in the UK.

The merger between the tech giant and the video game company was to be an all-cash deal.

Rival Sony expressed sharp opposition to the merger, as did US and EU regulators. The concern was that it would place control of popular game franchises such as Candy Crush, Call of Duty and World of Warcraft into Microsoft’s hands.

The UK regulator’s concerns were based on the way in which the merger would impact cloud gaming competition. Cloud gaming is played in streaming mode on phones, tablets and other mobile devices. This type of video game makes it possible for device users to play without having to purchase expensive gaming computers or consoles.

Many view cloud gaming as being potentially industry-changing by providing consumers with greater choice regarding how – and even where – they choose to play. This was underscored by the Competition and Markets Authority’s independent expert panel chair Martin Colman.

“This means that it is vital that we protect competition in this emerging and exciting market,” said Colman.

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