Microsoft has had its $68.7bn (£55bn) acquisition of Activision Blizzard blocked by the Competition and Markets Authority (CMA), the regulator confirmed on Wednesday.
“Cloud gaming needs a free, competitive market to drive innovation and choice,” a panel chair said.
The CMA subsequently announced it would probe the acquisition last September. Microsoft proposed a string of remedies, including reassuring the CMA that popular games like Call of Duty would be available on PlayStation.
The CMA backtracked on its view that the deal would stifle competition in console gaming in March, bringing the companies and regulator closer to a deal.
But the CMA ruled today that Microsoft’s proposals “did not sufficiently cover different cloud gaming service business models,.”
The regulator said that Microsoft would still find it “commercially beneficial” to make Activision games exclusive to its own cloud gaming service.
“We remain fully committed to this acquisition and will appeal,” Microsoft’s vice chair and president, Brad Smith, said in a statement.
“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” Smith added.
“The report’s conclusions are a disservice to UK citizens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that – despite all its rhetoric – the UK is clearly closed for business,” Activision Blizzard added in a statement.