The UK blocks Microsoft’s Activision Blizzard acquisition

The Future. The $68.7 billion tie-up of Microsoft and Activision Blizzard leveled up in difficulty thanks to the UK’s antitrust authority ruling that it was a no-go, citing growth in cloud gaming would give the corporation a monopoly. Although cloud gaming is still in its infancy, it’s expected to become a $14 billion business by 2026… which shows that regulators are now factoring in emerging markets in antitrust cases.

Game over?
The UK’s Competition and Markets Authority blocked the acquisition on the basis it could harm competition in the budding cloud-gaming sector.

• The regulator ruled Microsoft could eventually make Activision games exclusive to its Xbox gaming platform, which would hurt consumers.
• Microsoft already represents 60-70% of the global cloud-gaming market.
• Having stated that it wants to close the acquisition deal by July 18th, Microsoft plans to appeal quickly.

When the news hit, analysts shared they were no longer confident the deal would close. That sent Activision Blizzard’s stock down a steep 11%. But Microsoft was up 8% after it reported revenue increases in its content and services division — which, lo and behold, includes Xbox Game Pass. 

If the appeal fails and emboldens ongoing lawsuits from the FTC and the EU’s antitrust regulator to also block the deal, Microsoft will have to pay a $3 billion breakup fee to Activision Blizzard.