UK blocks Microsoft's $69 billion takeover of Activision
April 26, 2023
Microsoft has been trying to buy the game company Activision Blizzard with hits like "Call of Duty" since early 2022. But british antitrust regulators have blocked the deal.
Advertisement
The UK on Wednesday blocked Microsoft's $69-billion (€62-billion) takeover of US video game giant Activision Blizzard, owner of hit games "Candy Crush" and "Call Of Duty", arguing it would harm competition in cloud gaming.
The country's antitrust regulator, Competition and Markets Authority (CMA), said that Microsoft's commitment to offer access to Activision's multi-billion dollar "Call of Duty" franchise to leading cloud gaming platforms would not effectively remedy its concerns.
The regulator said it prevented the deal "over concerns... (it) would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come."
Xbox-owner Microsoft announced its Activision bid in January 2022 to boost its firepower in a video gaming market, triggering antitrust concerns worldwide. Europe will decide on the Activision deal by May 22. The US Federal Trade Commission is also seeking to block it.
From Atari to Xbox Series X: The evolution of video game consoles
Massive or playful, original, and sometimes elegant: Every new video game console generation has a fresh design. Sometimes they reflect the zeitgeist, others are revolutionary.
Image: Microsoft
Xbox Series X (2020)
Microsoft remained true to the established console design tradition for its Xbox Series X. Many social media critics felt it looked uninspired, and the console was ridiculed for resembling a computer tower or even a mini-fridge, which is why it earned the nickname "Xbox Fridge."
Image: Microsoft
PlayStation 5 (2020)
With its playful curves, the PS5 looks futuristic. It also breaks with the PlayStation tradition, as it is for the first time in two colors. The reactions on social media are divided: For some, the design is a revelation, for others, the look is reminiscent of a wireless router. The following pictures in this gallery take a look back at how games consoles have developed since the late 1970s
Image: Reuters/Sony Interactive Entertainment Inc.
Atari Video Computer System (1977)
The Atari VCS, also known as Atari 2600, was the first console bestseller. With games like Q*bert, Pacman and Space Invaders, the console delighted millions of gamers worldwide. The design was based on the wood veneer look popular with the era's TV sets.
Image: picture-allince/Zuma Wire/D. Klamka
Nintendo Entertainment System (1983)
The Nintendo Entertainment System (NES) was launched in Japan as a family computer under the name Famicom. The unremarkable grey box still has fans to this day. Manufacturer Nintendo laid the foundation for famous game series like Super Mario Bros. and Zelda. The controller was the first to introduce the control pad, which became standard for all manufacturers.
Image: picture alliance/R. Goldmann
Super Nintendo Entertainment System (1990)
In 1990, the Super Nintendo Entertainment System (SNES) was released in Japan under the name Super Famicom, followed by the US in 1991 and Europe a year later. With its rounded corners and large buttons, the drab grey console was a robust toy for children that easily survived a tumble from a shelf without damage.
Image: picture-alliance/dpa/C. Seidel
Playstation (1994)
Sony's success story on the console market began with the Playstation. The sleek device was inspired by the SNES. Originally, Sony was supposed to develop a CD drive for the SNES, but Nintendo decided to go with another company. Sony built its own console and became a major competitor.
Image: picture-allince/Zuma Wire/D. Klamka
Nintendo GameCube (2001)
The name says it all. The standard edition was a purple cube, the shape a reference to an object that is an inherent part of many games, the dice. The color purple was intentional, as Nintendo mainly produced video games suitable for children, selling them exclusively for Nintendo consoles.
Image: picture-alliance/dpa/AFP/Y. Tsuno
Xbox (2002)
The Xbox was the first console created by Microsoft. The company was keen to establish the Xbox brand as quickly as possible, which might explain the decision to cover the console with a large letter "X." Size mattered: The Xbox was slightly bigger and blockier than other consoles.
Image: picture-alliance/dpa/J. Gurzinski
Xbox 360 (2005)
The Xbox 360 is an example of poor design. It is not necessarily ugly, but the ventilation didn't work well. When the console overheated, the LEDs surrounding the power button turned red. Often enough, that meant the console needed to be taken to a repairshop. The infamous "Ring of Death" went down in gaming history.
Image: Imago/Zuma/M. Day Mass
Wii (2006)
Nintendo's Wii was a slim, white console with a slant. At the time, the color white was the hottest color for cool, technical devices. The iPod, which had been around for several years, was also white. Controllers with motion sensors and a wrist strap were innovative features that gave people a new gaming experience.
Image: picture alliance/ImageBROKER/NielsDK
Playstation 4 (2013)
The Playstation 4 came along with a simple-looking, reserved design, but it wasn't without appeal. The glossy piano varnish surface gave it an elegant touch. Buttons, connections and drive were cleverly concealed. This console was no longer a child's toy.
Image: picture-allince/dpa/A. Warnecke
Nintendo Switch (2017)
While Sony and Microsoft continued to develop their tried and tested models, Nintendo turned to something new: enter the Switch. The device was a hybrid, half handheld, half stationary console — basically a display with connected controllers.
Image: picture alliance/dpa/C. Gateau
12 images1 | 12
Microsoft and Activision will appeal the verdict
Both firms expressed deep disappointment over Britain's decision regarding the gigantic takeover, which has yet to win regulatory nods in Europe or the United States.
Advertisement
Microsoft's president Brad Smith said in a statement the company remained fully committed to the acquisition and would appeal the decision, while Activision said it would "work aggressively" with Microsoft to reverse it.
Activision's CEO Bobby Kotick told staff it was not "the news we wanted — but it is far from the final word on this deal."
Activision also threatened to reassess its growth prospects for the UK. "Global innovators large and small will take note that — despite all its rhetoric — the UK is clearly closed for business," the company said in a separate statement.
Shares in Activision, which also makes "Overwatch" and "World of Warcraft," fell 10% in premarket US trading to $78, moving further from Microsoft's offer price of $95 per share.
That left cloud streaming services as the remaining hurdle, which Microsoft sought to overcome by signing licensing deals with the owners of streaming platforms including Valve Corp, Nvidia and Boosteroid. It had already offered Sony a 10-year "Call of Duty" license, in line with an agreement to bring the multi-billion dollar franchise to Nintendo's Switch.
However, the CMA said Microsoft had an estimated 60%-70% of global cloud gaming services as well as competitive advantages including owning Xbox, PC operating system Windows and cloud provider Azure.
The US software giant offered licensing deals to allay the concerns, but the CMA said they would only include some Activision games, carried a significant risk of disagreement and would need overseeing by the regulator.