UK Courts No-Scopes Massive Gaming Deal to Date

Clare Louise Jackson /
Clare Louise Jackson /

A proposed merger between Activation and Microsoft was suddenly taken out with no warning by the long arm of UK law, thus “no-scoping” the merger with antitrust claims. The $69 billion deal was struck down with little warning, as the crown claimed that titles such as Call of Duty would suffer greatly in the massive cloud gaming market.

The UK’s Competition and Markets Authority issued a final report that said the only way to prevent a tremendous loss of competition within the marketplace “is to prohibit the merger.” Despite being announced 15 months ago, the all-cash deal saw Sony incredibly upset as this could potentially make Call of Duty and World of Warcraft an exclusive title for Microsoft’s X-Box gaming platform.

Liam Deane is a game industry analyst for the research firm Omdia who admitted everyone saw this decision in the UK as a total surprise. “It’s a big enough market to throw a pretty serious spanner in the works from Microsoft and Activision’s perspective, but things will get a lot worse if they also get the wrong decision from the European Commission in a few weeks’ time.”

For what it’s worth, Activision called the UK committee onto the carpet over their decision and sees this as yet another reason why so many countries avoid doing business in the UK. From this perspective, they see the UK as being closed for business, and now they believe they may need to restrict any plans for expansion in the country.

While they will appeal the decision, there is a lot to unpack here and the ruling can still be overturned. With Microsoft dangling 10-year deals out for cloud gaming to Sony and Nintendo, many hope that will alleviate their concerns, but it’s just an extra life that will be lost once the deal is done.