Activision Blizzards boss has hit out at the British governments competition regulator, accusing officials who blocked his companys $69 billion acquisition by Microsoft of misunderstanding the gaming industry.
On Wednesday, the U.K. governments Competition and Markets Authority (CMA) announced it had blocked Microsofts proposed $69 billion takeover of Activision, citing concerns that the deal would alter the future of the fast-growing cloud gaming market and stifle innovation and choice for consumers.
The tie-upwhich would have been the biggest deal in gaming historywould have seen Microsoft gain control of hugely popular game franchises like World of Warcraft, Candy Crush and Call of Duty.
In an interview with Bloomberg TV on Thursday, Activision Blizzard CEO Bobby Kotick slammed the U.K. regulators decision to prohibit the acquisition, labeling the CMAs ruling clearly irrational.
He argued that the CMA was wrongly amping up the significance of cloud gaming in the global gaming landscape, and noted that a slew of big names like Google, Apple, Tencent and Netflix had joined the ranks of those competing in the sector.
Cloud gaming is an inconsequential part of the business, he insisted, adding that mobile gaming accounted for a much larger proportion of the industry.
The thing I think was misunderstood, they were focused on the console gaming market, which Sony has roughly 80% market share in, rather than where the global market has gone, and thats to mobile gaming, and the bulk of our $160 billion industry is now on phones, Kotick said. Microsoft isnt in the mobile gaming business, and Candy Crush gives them a single title that gives them an opportunity to actually participate in the mobile market.
Mobile gaming phenomenon Candy Crush Saga is made by King, a subsidiary of Activision that is headquartered in London and Stockholm.
The idea that somehow [the CMA is] protecting all of these big, foreign competitors from market competition makes no sense, he said, noting that Microsoft had made it clear it would continue to provide cloud gaming content to other providers after the deal.
The CMA was not immediately available for comment when contacted by Fortune.
Kotick also suggested that rather than standing in the way of innovation, the Microsoft-Activision deal would have enhanced it.
The opportunity we have with Microsoft is to give them more access to mobile talent, mobile technology, and that is something they saw as incredibly valuable, he said. There is an enormous amount of talent at Microsoft, that if we were to have access to, would allow us to grow even better.
Koticks criticism of the U.K. government came as Microsofts President, Brad Smith, also lashed out at the countrys blocking of its deal.
This decision, I have to say, is probably the darkest day in our four decades in Britain, he told Britains BBC Radio 4 on Thursday. It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than weve ever confronted before.
He had earlier said in a statement that the CMAs decision appeared to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.
Both Microsoft and Activision have said they will appeal the CMAs decision.
We have every expectation, as does Microsoft, that we should prevail in an appeal, Kotick told Bloomberg on Thursday. We think the appeals process will work in our favor.
Microsoft and Activisions purchase agreement has a July deadline. Neither party has said whether they will extend the agreement beyond the current cutoff.
