UK blocks Microsoft $69-bn Activision deal over cloud gaming concerns

Britain said it would block Microsoft's $69-billion acquisition of "Call of Duty" maker Activision Blizzard over its concerns it would harm competition in cloud gaming.

The country's antitrust regulator said 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.

Microsoft said in a statement it remained fully committed to this acquisition and would appeal.

“We remain fully committed to this acquisition and will appeal,” Brad Smith, vice chair and president of Microsoft, said. “The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK.”

Activision's shares were down more than 10% in US pre-market trade.

The surprise ruling comes after the Competition and Markets Authority (CMA) last month dropped its concerns about the impact of the deal on the console market led by Sony's market-leading PlayStation.

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 NVDA.O and Boosteroid.

Microsoft had already offered Sony - a vocal opponent of the deal - a 10-year "Call of Duty" licence, in line with an agreement to bring the multi-billion dollar franchise to Nintendo's Switch.

Europe will decide on the deal by May 22. The United State's Federal Trade Commission is also seeking to block it.

With inputs from Reuters