UK regulator strikes a blow: contrary to predictions, CMA fails to approve Microsoft and Activision Blizzard deal

Phil Spencer won't be popping champagne today.

Contrary to analyst predictions and insider information from reputable media source, the UK Competition and Markets Authority (CMA) has blocked a deal between Microsoft and Activision Blizzard.

Here's What We Know

In a statement, the CMA said that the regulator fears Microsoft's monopoly in the fast-growing cloud services market.

The British regulator points out that the U.S. corporation has 60-70% of the cloud services at its disposal, and after this deal the influence on this area of the video game market will become absolute, and other companies will not be able to compete with Microsoft.

The CMA also notes that by including such super popular Activision Blizzard games as Call of Duty and World of Warcraft in the Game Pass catalogue, the corporation will certainly increase the cost of subscriptions, which will have a negative impact on gamers in the UK and around the world.

It's hard to predict whether this decision will put an end to the Microsoft and Activision Blizzard merger, but it will certainly make an already protracted process very difficult. All the more interesting is the decision of the European Regulatory Commission, which should come before the end of April.

The first reaction of the market to the CMA's decision was a 10% drop in Activision Blizzard shares, which clearly does not please either the company's management or investors.