The ongoing saga in the Microsoft / Activision acquisition came to a head today with the UK’s CMA (Competition and Markets Authority) blocking the move.
According to the CMA, the deal has been blocked over, “concerns the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.”
This is only the second time the CMA has blocked a large tech merger and it’s a blow for the deal which was expected to go through.
Activision Blizzard CEO Bobby Kotick issued a mail to staff which has been posted on Substack. Microsoft will, of course, appeal the decision and the CMA has been criticised for holding the UK back when it comes to tech innovation. Kotick added:
The UK hopes to grow its leadership position in technology, and a combined Microsoft-Activision would accomplish exactly that. At a time when the fields of machine learning and artificial intelligence are thriving, we know the UK market would benefit from Microsoft’s bench strength in both domains, as well as our ability to put those technologies to use immediately. By contrast, if the CMA’s decision holds, it would stifle investment, competition, and job creation throughout the UK gaming industry.
Microsoft’s vice-chair and president and Brad Smith commented similarly.
“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK”.
On the Guardian, an Activision spokesperson was quoted as saying:
The CMA’s report contradicts the ambitions of the UK to become an attractive country to build technology businesses. We will work aggressively with Microsoft to reverse this on appeal.
“The report’s conclusions are a disservice to UK citizens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that – despite all its rhetoric – the UK is clearly closed for business.
The spokesperson is not wrong. The UK is a complete basket case right now with spiraling costs with some people struggling to feed themselves or heat their homes. The UK is once again the sick man of Europe and it’s not exactly a country attracting investment and growth.
This will not be the end of this battle, an appeal is happening and that process is already underway.