Wednesday was Microsoft’s ‘darkest day in our four decades in Britain’ claims president Brad Smith, in strangely threatening new comments.
It’s fair to say that the decision by the UK’s Competition and Markets Authority (CMA), to block Microsoft’s acquisition of Activision Blizzard, was not what anyone was expecting, after they’d previously implied that they were going to allow it.
It took everyone by surprise and Microsoft has not even tried to hide its anger and frustration. It seems to be getting angrier the more it thinks about it too, with Microsoft vice chair and president Brad Smith making veiled threats about decreasing investment in the UK.
Smith described Wednesday as the ‘darkest day in our four decades in Britain’ and said that the deal was ‘bad for Britain’, that made the EU seem like a better place for tech companies to do business.
It’s unclear whether he has anything specific in mind when he says this, or if he’s just fuming, but the EU decision on the acquisition is expected on May 22. They’re expected to give it the go ahead, but while the CMA was as well the EU has generally been less sceptical about the acquisition since the start.
The US remains Microsoft’s biggest problem though, as their decision is due on August 2 and in the past they’ve almost been as negative about it as the CMA.
‘It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before,’ said Smith.
Speaking on BBC Radio 5’s Wake up to Money programme, Smith added that the UK government, ‘needs to look hard at the role of the CMA and the regulatory structure.’
All this ignores the fact that, in terms of Xbox, the UK is the second most important country for Microsoft, after the US.
It’s not only the only other place where the Xbox rivals the PlayStation for sales (Sony is far more dominant on the Continent) but it’s also home to some of the few Microsoft-owned game developers not based in North America, such as Sea Of Thieves maker Rare and Forza and Fable developer Playground Games.
It’s not clear whether Smith even realises that, as he claims that ‘people are shocked, people are disappointed, and people’s confidence in technology in the UK has been severely shaken.’ Although it’s not immediately clear which people he’s talking about, other than Microsoft execs.
The CMA has already responded to Smith’s comments, insisting that its role was to ‘do what is best for the people, businesses and economy of the UK, not merging firms with commercial interests.’
Perhaps the most surprising part of their decision is that in the end it had little to do with Call Of Duty or any of the other influential games that Microsoft would gain control of, but the future of cloud gaming.
Microsoft already has a head start with the technology, with a 60 to 70% share of the current gaming market, and the CMA is worried that if it also owned so many large online franchises it would become impossible for other games companies to compete.
‘We want to create an environment where a whole host of different companies can compete effectively, can grow and innovate,’ said a CMA spokesperson.
As you can probably guess, Microsoft is going to appeal the decision but it’s unclear if that will happen before the US decision in August. If that also comes out against Microsoft then the entire acquisition may be dead in the water.
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