Plot twist alert - UK blocks Microsoft-Activision deal

But, the reason why the CMA said no is confusing, to say the least.

High-profile cloud gaming services are close to nonexistent. Google Stadia tried and ultimately failed and it wouldn't be a huge surprise if Amazon Luna followed suit. The CMA claims that Microsoft owns as much as 70% of the current market share, but it's a huge chunk of a little next to nothing. The entire video game industry isn't affected by the comings and goings of cloud gaming. Although many companies are still bullish on cloud gaming, it doesn't make sense to use it as the main reason for blocking the deal. This would've made more sense if Microsoft planned to make Activision Blizzard games exclusive to Microsoft's cloud gaming services, which Microsoft has claimed several times wouldn't happen - at least until its deals with Nintendo and other companies are still intact.

If this deal falls apart, we reckon Microsoft and Activision Blizzard will feel the brunt of the criticism and the financial hit. It has already had an effect on the latter after its stock price dropped by a substantial amount after the news and things could only get worse from here. We'll have to see what happens following the appeal but this turnout makes what many felt was a sure thing into the first step of the worst-case scenario.

Despite the setback, Microsoft is likely to continue investing in the gaming space. However, the denial should put planned high-profile acquisitions in the gaming space on notice. The CMA's decision suggests that regulators will start monitoring and scrutinizing such deals more closely in the future, with an intensified focus on ensuring fair market competition for the purpose of protecting the consumer.

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