The UK Doesn’t Want Microsoft’s Activision Blizzard Deal, So What Happens Next?
upstart writes:
Microsoft is furious. Last week, a surprise decision from the UK's Competition and Markets Authority (CMA) left its $68.7 billion deal to acquire Activision Blizzard blocked in Britain, thanks to concerns about the future of cloud gaming.
Microsoft president Brad Smith was awake at 2AM that morning hastily writing a response from across the pond, according to Bloomberg. He spoke to the BBC a day later and called the UK regulator's decision the "darkest day" for Microsoft in its four decades of working in Britain. He went a step further and said "the European Union is a more attractive place to start a business" than the UK, a particularly stinging statement given the political issues around Brexit.
Now, Microsoft is bruised, angry, and plotting its next move. If Brad Smith's fighting talk is anything to go by, Microsoft will try to keep this deal alive. But the CMA's decision won't be an easy one to appeal.
[...] Meta's battle with the CMA over its Giphy acquisition shows what Microsoft might be in store for. Meta was originally ordered to sell Giphy in 2021 but appealed the ruling and was unsuccessful. Meta eventually had to comply with the UK competition watchdog and divest itself of social media GIF library Giphy. Viagogo's $4 billion takeover of StubHub was also partially blocked by the CMA, forcing the company to keep StubHub's US and Canadian operations but sell its UK and international businesses.
[...] The CMA said in September that it was concerned about the effects of Microsoft owning Activision Blizzard games on existing rivals and emerging entrants offering multi-game subscriptions and cloud gaming services. I tweeted at the time that all of the headlines around Call of Duty were just noise, and there would be bigger concerns around Microsoft's ability to leverage Windows and Azure, unlike its competitors, and how it could influence game distribution and revenue shares across the game industry with its Xbox Game Pass subscription.
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