Britain’s top competition regulator on Wednesday moved to block Microsoft
’s acquisition of video game publisher Activision Blizzard. The measure marks a major blow for the U.S. tech giant, as it seeks to convince authorities that the deal will benefit competition. Microsoft said it plans to appeal the decision.
Shares of Activision Blizzard slumped more than 8% in early U.S. trading. Microsoft shares were up 7% but this was largely linked to the company’s strong earnings report Tuesday.
The U.K. Competition and Markets Authority said it opposed the deal as it raises competition concerns in the nascent cloud gaming market. The CMA previously held concerns about competition in games consoles being undermined but ruled out this concern in a preliminary decision in March.
Microsoft could make Activision’s games exclusive to its cloud gaming platform, Xbox Game Pass, cutting off distribution to other key industry players, the CMA said.
