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Microsoft’s game studio-shopping spree has hit an unexpected road block, after the company’s deal to acquire Activision Blizzard failed to push through. This new development comes as a result of UK regulatory proceedings, which took place over the course of several months.
The move to block the acquisition comes from the UK’s Competition and Markets Authority (CMA), which based its decision on possible implications of the said deal on the cloud gaming industry. More specifically, the CMA stated that the acquisition might lead to “stifled competition” in a market segment that’s still in the process of growing. Microsoft is now set to make an appeal regarding this decision. As per Microsoft president Brad Smith:
“We remain fully committed to this acquisition and will appeal. The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom.”
Smith stated that the company has already signed contracts to bring several Activision Blizzard titles to gamers, and will continue to push for the deal’s completion “through regulatory remedies.” He adds that the decision conveys a lack of proper understanding of the market, and how cloud technology works. The decision was also met with criticism on Activision Blizzard’s behalf, with the company describing the decision as a “disservice” to UK citizens.
The CMA has backed up its decision to block the deal, and while it acknowledged that cloud technology gives gamers the opportunity to cut costs on expensive gaming hardware as well as more freedom in accessing video games, it stresses that allowing Microsoft to push forward with the acquisition would result in undermining innovation needed for the development of such opportunities.
Source: Eurogamer
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