It's not 鈥済ame over鈥 yet for Microsoft's quest to buy the video game maker Activision Blizzard, but the software giant is starting to run out of clear pathways to complete its $69 billion takeover.
Wednesday when British antitrust regulators said they would block the acquisition. Microsoft and Activision have vowed to appeal, but the deal also faces legal challenges in other parts of the world.
It's been more than 15 months since Microsoft, owner of the Xbox gaming system, first revealed its plans to buy the publisher of popular game franchises like Call of Duty, World of Warcraft and Candy Crush. But there's no end in sight.
HOW MANY LIVES LEFT?
The deal awaits an important May decision from antitrust regulators representing the 27-nation European Union. It must also undergo an August trial in the U.S. before an administrative judge at the Federal Trade Commission. But a former FTC official says the U.K. decision could be a deal-breaker, especially if the appeals tribunal follows its 鈥渧ery deferential鈥 approach to the regulator.
鈥淚f this were a smaller jurisdiction with a tiny population, the companies could shrug and say, 鈥榃e just won鈥檛 do business there,鈥欌 said former FTC Chair William Kovacic. 鈥淭hey can鈥檛 do that very effectively with the United Kingdom. So a U.K. decision to block is basically a global decision to block the transaction.鈥
WHAT DOES IT MEAN FOR GAMERS?
Nothing for now. But even if Microsoft is able to complete the purchase, the average gamer is not going to notice immediate changes.
Harder to assess are the long-term effects on the games that get made and how people can play them, said Liam Deane, a game industry analyst at Omdia. That's part of what antitrust enforcers around the world have spent the past year investigating.
Microsoft had promised to keep popular titles like Call of Duty on rival platforms like Sony's PlayStation and Nintendo for at least a decade, but future Activision Blizzard games could be exclusive to Xbox.
鈥淒own the line, it would have quite a big impact,鈥 Deane said. 鈥淎ctivision is a big publisher, it has a big market share鈥 and that could affect the 鈥渞elative strength of the different console platforms.鈥
HAVE OTHER COUNTRIES APPROVED IT?
Yes, the deal won approval March 28 in Japan, a hub for game development and the home of both Sony and Nintendo. It's also been approved in Brazil, South Africa and some smaller markets.
WHY DID U.K. BLOCK IT?
It was the small but growing cloud gaming market, not the existing console rivalry between Xbox and Sony, that the Competition and Markets Authority said it was concerned about.
Streaming games to tablets, phones and other devices has freed players from buying expensive consoles and gaming computers.
鈥淲hat the CMA said, essentially, is that in cloud gaming Microsoft is the market leader," Deane said. "And even though that is a smaller market, it鈥檚 one that鈥檚 at a critical stage where it鈥檚 just starting to take off and potentially that is going to become a huge platform in the future. And therefore it would be a risk to competition to strengthen Microsoft鈥檚 position in that market where they鈥檙e already leading.鈥
The watchdog said it reviewed Microsoft鈥檚 proposed remedies but found they would require its oversight, whereas preventing the merger would allow cloud gaming to develop without intervention.
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AP writer Kelvin Chan in London contributed to this report.
