The United Kingdom's Competition and Markets Authority (CMA) has put a halt to Microsoft's ambitious $69 billion acquisition of Activision Blizzard, the developer behind Call of Duty. The authority cited concerns regarding the tech giant obtaining excessive power in the rapidly growing cloud gaming market.
Microsoft currently controls between 60% and 70% of the global cloud gaming industry through its Xbox platform. The CMA had previously voiced worries over this issue in February, giving Microsoft an opportunity to propose remedies. However, after reviewing the situation, the regulator ultimately decided that any potential remedy from Microsoft would not be sufficient.
In response to this decision, both companies have announced their intentions to appeal. Brad Smith, President of Microsoft, expressed his determination for progress by stating:
Activision shares fell by 12%, while Microsoft experienced an almost 8% surge following a strong earnings report.
This development poses significant challenges for one of history's most substantial deals within the gaming sector. In addition to opposition from Britain's antitrust watchdogs, US Federal Trade Commission (FTC) scrutiny also looms large over this takeover bid.
European Union regulators are expected to make their ruling on this matter by May 22nd as corporate leaders grow increasingly anxious about consumer backlash against deals like these that could limit choices for gamers and potentially increase prices down the line.