Last updated: April 26, 2023, 6:49 PM IST
Microsoft’s worst fears have come true
UK regulators on Wednesday blocked Microsoft’s $69 billion purchase of video game maker Activision Blizzard, thwarting the largest technology deal in history amid concerns it would stifle competition in the burgeoning cloud gaming market.
LONDON: UK regulators on Wednesday blocked Microsoft’s $69 billion purchase of video game maker Activision Blizzard, thwarting the largest technology deal in history amid concerns it would stifle competition in the burgeoning cloud gaming market.
The Competition and Markets Authority said in its final report that “the only effective remedy” against the substantial loss of competition “is to prohibit the Merger”. The companies have promised to appeal.
The all-cash deal has met stiff opposition from rival Sony and has also come under scrutiny from regulators in the US and Europe over fears it would give Microsoft control of popular game franchises such as Call of Duty, World of Warcraft and Candy Crush.
The UK watchdog was concerned about the deal’s impact on competition in cloud gaming, where games are streamed to tablets, phones and other devices. That frees players from the need to buy expensive consoles and gaming computers.
Cloud gaming has the potential to change the industry by giving people more choice about how and where they play, said Martin Colman, chair of the Competition and Markets Authority’s independent expert panel examining the deal.
“This means it is vital that we protect competition in this emerging and exciting market,” he said.
Microsoft said it was disappointed and indicated it was not ready to give up.
“We remain fully committed to this acquisition and will appeal,” President Brad Smith said in a statement. He said the watchdog’s decision “rejects a pragmatic path to tackling competition concerns” and discourages technology innovation and investment in the UK.
“We are particularly disappointed that, after much deliberation, this decision appears to reflect a lack of understanding of this market and how the relevant cloud technology works,” said Smith.
Action also responded, saying it would “aggressively work with Microsoft to overturn this on appeal.”
Regulators had last month dropped concerns that the deal would hurt console gaming, saying it wouldn’t benefit Microsoft to make Call of Duty exclusive to its Xbox console.
The watchdog said Wednesday it has reviewed Microsoft’s proposals to “significantly” eliminate the competition concerns, but felt those solutions would require its oversight, while preventing the merger would allow cloud gaming to continue uninterrupted. can develop.
Microsoft already has a strong foothold in the cloud computing market, and regulators concluded that if the deal goes through, it would bolster the company’s advantage by giving it control of key gaming titles.
Read all the latest technical news here
(This story has not been edited by News18 staff and was published from a syndicated news agency feed)
