Microsoft’s President, Brad Smith, has expressed his disappointment with the UK after it was blocked from acquiring US gaming company Activision. Smith said that the move was “bad for Britain” and marked Microsoft’s “darkest day” in its four decades of working in the country. He also stated that the European Union is a more attractive place to start a business than the United Kingdom.
The UK’s Competition and Markets Authority (CMA) blocked the acquisition, citing concerns that the deal would hit innovation and give gamers less choice in the fast-growing cloud gaming market. The merger is crucial for Microsoft as it sees cloud gaming as the industry’s future and wants to strengthen its position in the market. If the deal had gone through, Microsoft would have gained popular games titles, including Call of Duty, Candy Crush, and World of Warcraft, allowing it to compete more effectively with rivals like Sony.
However, the CMA ruled that Microsoft already had a 60-70% share of the cloud gaming market, and combining with Activision would “really reinforce… [its] strong position.” The regulator also said that Microsoft would have an incentive to restrict access to Activision’s titles to PlayStation, which would be bad for gamers.
While Microsoft and Activision have said they will appeal against the CMA’s decision, Smith’s comments about the UK have drawn criticism. A spokesman for Prime Minister Rishi Sunak said that the UK games sector had doubled in size over the last 10 years and that Smith’s claims about the EU being a better place to do business were not borne out by the facts.
The UK government has made it one of its post-Brexit goals to bring in a “light-touch” set of rules for science and technology to encourage economic growth. However, the number of recent takeovers of British firms by overseas ones has increased concerns that the UK market is declining in importance and failing to attract fast-growing tech firms.
In conclusion, the CMA’s decision to block Microsoft’s acquisition of Activision has sparked debate about the UK’s attractiveness as a place to do business. While Microsoft has expressed its disappointment with the decision, the regulator has argued that it must do what is best for people, not merge firms with commercial interests. The appeal process is ongoing, and the outcome remains to be seen.
