The planned mega takeover of the video game company Activision Blizzard by Microsoft has been blocked by British competition watchdogs. The reason for this is concern that the deal, which is worth around 69 billion dollars, could distort competition in the growing cloud gaming market, said the Competition and Markets Authority (CMA) on Wednesday.
“The final decision to deny the deal came after Microsoft’s proposed solution failed to effectively address concerns in the cloud gaming sector,” one said press statement. In September last year, a “detailed examination of the project” was initiated and the preliminary result was “that the merger could make Microsoft even stronger in the cloud gaming area and hinder competition in this growing market.”
It is already the second major hurdle for the takeover announced at the beginning of 2022: In the USA, the FTC regulator is suing. Microsoft wants to appeal the decision, as the company announced to the financial service Bloomberg, among others.
Microsoft has a strong position in the video game business played over the Internet. The CMA analysis found that holding back Activision Blizzard game titles for just one cloud service could be commercially advantageous for the Xbox group. The British competition authorities had previously put their initial concerns about the console market into perspective.