The largest-ever gaming transaction will suffer an unexpected setback when Britain decides to veto Microsoft’s (MSFT.O) $69 billion acquisition of “Call of Duty” creator Activision Blizzard (ATVI.O) due to fears that it will reduce competition in cloud gaming.
The nation’s antitrust watchdog declared on Wednesday that Microsoft’s promise to let popular cloud gaming platforms access to Activision’s multibillion-dollar “Call of Duty” series would not adequately allay its worries.
Activision stated it would “work aggressively” with Microsoft to overturn the verdict, while Microsoft’s president Brad Smith said the business remained completely committed to the acquisition and will appeal the ruling.
Bobby Kotick, CEO of Activision, warned colleagues that although it was not “the news we wanted,” it was still far from the end of the deal.
“We will reassess our growth plans for the UK,” the company said in a separate statement. “Global innovators large and small will take note that – despite all its rhetoric – the UK is clearly closed for business.”
Activision’s stock dropped over 12% to $76.65, moving further away from Microsoft’s offer price of $95 per share. Activision is the publisher of “World of Warcraft,” “Overwatch,” and “Candy Crush.” If the losses hold, the video game publisher would lose about $8 billion in market value.
The gaming business also released its quarterly results on Wednesday, a day ahead of schedule. The results were better than expected in terms of bookings, but it didn’t seem to do much to relieve investor concerns regarding Britain’s move.
A day after the developer of Office software surpassed Street expectations for quarterly revenue and earnings, Microsoft shares climbed to their highest level in more than a year.
To increase its might in a video game market dominated by Tencent, the business launched its Activision offer in January 2022.
