Microsoft is facing a major setback as its $68.7 billion deal with Activision Blizzard has been blocked in the UK by the Competition and Markets Authority (CMA) due to concerns around the future of cloud gaming. Microsoft’s president, Brad Smith, has described the decision as the “darkest day” in the company’s four-decade history in Britain, and the CMA’s decision has left Microsoft “bruised, angry, and plotting its next move.” The company will now have to file an appeal with the Competition Appeal Tribunal, which can be a lengthy process, and chances of winning are slim as the CMA has won 67% of all merger appeals since 2010. Despite signing deals with rival cloud gaming services, the CMA has deemed them “too limited in scope” and raised concerns around Microsoft potentially retaining all revenue from sales of Activision games and in-app purchases. The fate of the deal now rests on the shoulders of the European Union, with Microsoft hoping that the Nvidia and Nintendo licensing agreements will help sway EU regulators.
