[Sergey Galyonkin from Raleigh, USA, CC BY-SA 2.0 , via Wikimedia Commons]

UK Gives Microsoft A Reality Check

American regulators usually won’t mess with Microsoft, but that is not stopping those in Great Britain. Britain’s top competition regulator has blocked Microsoft’s acquisition of video game publisher Activision Blizzard, famous for hit titles like World of WarcraftCall of Duty, and Candy Crush.

NBC News writes, “Microsoft could make Activision’s games exclusive to its cloud gaming platform, Xbox Game Pass, cutting off distribution to other key players in the space, the Competition and Markets Authority said.

Cloud gaming is a technology that enables gamers to access games via companies’ remote servers — effectively streaming a game like you would a movie on Netflix. The technology is still in its infancy, but Microsoft is betting big on it becoming a mainstream way of playing games.

“Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities,” the CMA said in a press release Wednesday.

Microsoft offered the CMA remedies in an attempt to resolve its concerns — including ‘requirements governing what games must be offered by Microsoft to what platforms and on what conditions over a ten-year period’ — however the regulator rejected the proposals.”

Brad Smith, vice chairman and president of Microsoft, said his company still had plans to make the buy. “The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” he said.

He noted that Microsoft has already signed contracts to make Activision Blizzard’s games available on 150 million more devices.

“We’re especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.”

BBC explained that the deal must be approved “by regulatory bodies in the UK, United States and European Union.

The CMA is the first of the three regulators to rule, meaning its decision could scupper the whole takeover – which is why today’s decision is a particularly significant part of the process.

The UK body said it was not concerned that the deal would distort competition in the console gaming market.

But Martin Coleman, who chaired an independent panel that investigated the proposal for the regulator, said it was vital to protect competition in the ’emerging and exciting market’ of cloud gaming.”

[Read More: Pop Superstar Put On The Stand]