After achieving victory with both Saudi Arabia and Brazilian market regulators (Brazil being a big blow for Sony), Microsoft has found a new challenger as the UK has officially said that the Activision Blizzard acquisition will hurt the gaming industry’s competition.

Basically, the UK Competition and Markets Authority (CMA) sees that the acquisition could lessen the competition in the gaming console, subscriptions service and cloud gaming spaces.

Elaborating, the CMA points to the 'network effect' of the console market, where a console with a lot of gamers attracts more content, which in turn attracts more gamers.

In other words, big franchises such as Call Of Duty could be a big differentiator between Xbox and Playstation.

Other concerns include the power that subscription based service has gained in just a few years and believes that even if Microsoft could not buy Activision Blizzard, the gaming conglomerate might need to adopt this type of business to survive the market.

Of course, Microsoft responded and in defiant way

Microsoft officially questioned the rhetoric used on the CMA’s statement and the usage of the CMA Phase 2 (further scrutiny) and while accusing Sony of being against growing competition, insisted that Playstation will be one of the beneficiaries of the acquisition.

“These unsupported theories of harm are not sufficient to justify a reference to Phase 2.

The suggestion that the incumbent market leader, with clear and enduring market power, could be foreclosed by the third largest provider as a result of losing access to one title is not credible.

In short, Sony is not vulnerable to a hypothetical foreclosure strategy, and the Referral Decision incorrectly relies on self-serving statements by Sony which significantly exaggerate the importance of Call of Duty to it and neglect to account for Sony's clear ability to competitively respond

While Sony may not welcome increased competition, it has the ability to adapt and compete. Gamers will ultimately benefit from this increased competition and choice.”

Observers has insisted that an official FTC’s (USA’s regulator) statement confirming that they don’t have a legal stand to object the transaction, practically will green light a cascade effect on major approval around other markets, but if the FTC is actually awaiting for UK’s scenario to be resolved just to buy some time if they are also not interested on the transaction to close.

It is well-know that current FTC under Biden Administration has vowed to stop the tech giants to buy others just to grow but as this is practically a vertical transaction (companies that are in officially different markets buying each other instead of competitor buying a competitor), they are limited on how the can stand against Microsoft in a legal standpoint.