Britain's antitrust regulator announced on Wednesday that it would block Microsoft's attempt to acquire Activision Blizzard for $69 billion, citing concerns about potential competition constraints in cloud gaming.
The move had a surprise effect on the gaming industry's largest-ever transaction. The regulator told Reuters that Microsoft's proposal to provide access to Activision's lucrative Call of Duty franchise to major cloud gaming platforms would not adequately address its concerns.
Microsoft is preparing to buy Activision Blizzard from its parent company, Microsoft, in an all-cash deal worth $68.7 billion. Despite the decision, Microsoft said it still intends to pursue the acquisition and plans to appeal the decision. Activision said today that it would collaborate closely with Microsoft in a concerted effort to overturn the ruling.
Our growth plans for UK will be reassessed, Activision said in a statement. Despite all its rhetoric, global innovators large and small will note that despite all its rhetoric the UK is clearly closed for business. Activision, known for popular games such as Call of Duty and Tony Hawk's Pro Skater, has been in a tussle for several months following reports of sexual abuse and harassment by the firm's executives. On Monday, Activision said it had fired dozens of employees following an investigation.
In recent years, Microsoft has become more active in gaming. Minecraft developer Mojang bought Minecraft creator Wii for $2.5 billion in 2014, according to the company. In 2020, Microsoft bought Bethesda, a game maker based in New York City, for $7.5 billion.
With nearly 95% of all players globally playing games on mobile, mobile is the largest gaming industry. Microsoft and Activision Blizzard will enable players to enjoy the most immersive franchises, such as Halo and Warcraft, virtually anywhere they want. And with games like Candy Crush, Activision Blizzard's mobile business represents a significant presence and opportunity for Microsoft in this rapidly expanding market.
With Activision Blizzard's almost 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will cement its position as one of the most compelling and diverse offerings of gaming content in the industry. Microsoft will be able to hire 30 internal game development studios and create additional publishing and esports production capabilities, according to the company's statement.