UK regulator, the Competition and Markets Authority (CMA) blocked Microsoft’s acquisition of Activision Blizzard on Wednesday, stating that the move would decrease competition in the gaming market. According to the CMA, Microsoft could potentially make Activision games exclusive to its cloud gaming service, limiting competition and innovation from other providers. The CMA also argued that Microsoft’s already strong position in cloud gaming would be strengthened by acquiring Activision, thereby reducing competition further.
Despite Microsoft’s promise to publish Activision games for the PlayStation console and use the merger to compete with Apple, the CMA claimed that the deal would impact the UK market and breached its guidelines. The company is expected to appeal the decision.
Although regulators in the rest of the world have approved the deal, the CMA’s ruling could jeopardize its completion. The US Federal Trade Commission has not yet issued its decision. The CMA’s decision has come under fire for showing a lack of understanding of the gaming market and not appreciating that cloud gaming is only a small part of it.
