Dark day for Microsoft as UK rejects acquisition of Activision Blizzard

Microsoft President Brad Smith said that it was the “darkest day” in four decades as the company’s proposed acquisition of Activision Blizzard was blocked in the UK. He described the UK’s decision as being a bad day for Britain because it discouraged innovation and investment in the UK.

Microsoft has confirmed it will appeal the UK regulator’s decision.

The UK’s Competition and Markets Authority (CMA) opposed Microsoft’s proposed acquisition of Activsion Blizzard’s portfolio as it had a number of concerns that the deal would hurt competition in the cloud gaming market. The Authority blocked the Microsoft takeover of Activision Blizzard’s catalogue with its premium titles that include Call Of Duty, Overwatch and World Of Warcraft.

Microsoft has been in the United Kingdom for 40 years and we play a vital role, not just supporting businesses and non-profits but even defending the nation from cyber-security threats,” said Smith. “But this decision, I have to say, is probably the darkest day in our four decades in Britain. It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before.” Brad Smith, President – Microsoft

Smith went on to condemn the CMA for opting to “torpedo” the transaction for cloud gaming fears, describing it as a “small” component of Microsoft’s company.

The CMA, for its part, indicated that it blocked the purchase because it sees the cloud gaming sector as “fast-growing,” and believes that if Microsoft’s acquisition would go ahead, it would create a “risk undermining the innovation that is crucial to the development of these opportunities”.

Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming and this deal would strengthen that advantage giving it the ability to undermine new and innovative competitors,” Martin Coleman, Chairman of the independent panel of experts who investigated the acquisition.

For the benefit of consumers

The UK cloud gaming market is growing fast. Monthly active users in the UK more than tripled from the start of 2021 to the end of 2022. It is forecast to be worth up to £11 billion globally and £1 billion in the UK by 2026. By way of comparison, sales of recorded music in the UK in 2021 amounted to £1.1billion.

The Competition and Markets Authority is the UK’s competition authority. It works to promote competition for the benefit of consumers, both within and outside the UK.

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