The competition regulator in the United Kingdom (U.K.) has blocked Microsoft’s (MSFT) $69 billion U.S. acquisition of video game maker Activision Blizzard (ATVI).
The move in Britain is a major blow for Microsoft as it seeks regulatory approval to complete its purchase of Activision Blizzard, which would boost its Xbox gaming division.
Microsoft announced its intention to buy Activision Blizzard in January 2022 for $69 billion U.S., making the deal one of the biggest transactions ever in the video game industry.
Activision Blizzard would give Microsoft popular video game franchises such as “Call of Duty” and “Candy Crush,” as well as lucrative intellectual property rights.
However, some of Microsoft’s competitors have publicly criticized the deal, saying it would give Microsoft too much control over the $200 billion U.S. global video game market.
Sony, maker of the rival PlayStation video game console, has been particularly vocal in its opposition to the acquisition, saying it fears that Microsoft could make “Call of Duty” exclusive to its Xbox consoles.
Microsoft has sought to allay those concerns by offering to make Call of Duty available to other gaming platforms for 10 years.
The British competition regulator has raised concerns about Microsoft’s potential to hinder competition in the cloud gaming market via its Xbox Game Pass subscription service.
However, even if Microsoft eventually wins over the U.K. regulator, it still needs to convince other regulators around the world not to block the deal.
The European Union continues to probe the deal to assess whether it would hurt competition, while the U.S. Federal Trade Commission (FTC) has sued to block the deal on antitrust grounds.
Microsoft’s stock has gained 2% over the last year to trade at $275.42 U.S. per share.
