CMA shoots down Microsoft-Activision deal
Microsoft’s takeover of the US video game company Activision Blizzard has been denied in the UK by the Competition and Markets Authority (CMA). The proposed $68.7bn (£55bn) deal would see Microsoft assume ownership of numerous titles, including Call of Duty, Crash Bandicoot, Tony Hawk’s Pro Skater and Candy Crush.
However, the regulator blocked the acquisition on the grounds that it could result in reduced innovation and less choice for consumers in the rapidly evolving gaming sector.
Both Microsoft and Activision have announced their intentions to appeal the decision. A spokesperson for Activision said: “The report’s conclusions are a disservice to UK citizens, who face increasingly dire economic prospects… Global innovators large and small will take note that the UK is clearly closed for business.”
Microsoft’s proposed takeover of Activision’s vast intellectual library is part of a longer-term strategy to increase its market share of cloud-based gaming. Microsoft has powerful gaming hardware in the form of its Xbox, but it lags behind competitors Nintendo and Sony when it comes to exclusive titles.
The failure of the deal to go through would leave Microsoft with $68.7bn burning a hole in its pocket. But, after Microsoft president Brad Smith told the BBC the CMA decision made the EU a better place to start a business, it seems unlikely that the tech giant will be investing it in the UK.
AI hype gives big tech share price boost
It was not all bad news for Microsoft. Share prices in the company increased by 7.2% following better-than-expected earnings, despite the CMA’s decision to block its acquisition of Activision emerging on the same day.
And Satya Nadella was not the only big tech executive to celebrate positive trading figures this week. Meta and Google parent company Alphabet also outperformed the, admittedly low, expectations of analysts, with year-on-year revenue increasing by 3% at both businesses.
After months of cost-cuttings, mass layoffs and AI investment, the big tech trio appear to have successfully navigated a challenging period for the digital advertising industry. Despite a brief dalliance with the metaverse, each is now hedging its bets on AI to boost valuations moving forward – The Guardian notes that the technology was mentioned more than 60 times during Alphabet’s subsequent call with investors.
But while the AI hype has helped to boost investor confidence in these businesses for the time being, it is yet to be seen whether these big investments will translate to the revenue required to make a sizable return. There has been a lot of talk about the transformational potential of AI – Google CEO Sundar Pichai said it would be more important than the discovery of fire – but unless this hype can be translated into profitable products, investors will soon lose interest.
No happily ever after for DeSantis and Disney
Disney has sued Florida governor Ron DeSantis in the latest escalation in the ongoing battle between the entertainment giant and Republican presidential candidate hopeful.
The two have been engaged in a year-long war of words after DeSantis branded Disney “woke” for speaking out in opposition to the governor’s “don’t say gay bill”, which put restrictions on discussions of sexuality and gender in Florida schools.
In response DeSantis has attempted to reverse some of the special privileges the company has enjoyed in the state and appointed a board to oversee its Orlando operations, which has since vetoed a planned expansion of the company’s theme park. Disney described the actions of the politician as “patently retaliatory, patently anti-business and patently unconstitutional”.
While it may seem surprising that a politician would take aim at one of the state’s biggest employers, the ongoing feud highlights the risk businesses take when wading into culture war issues. In a similar sign of the times, two AB InBev executives were put on leave this week after a Bud Light advertisement campaign, featuring transgender TikTok star Dylan Mulvaney, sparked outrage from some of its customers. Moving forward, many businesses may find that it’s much simpler to stay quiet on these politically divisive topics.
Sick days hit record level
British workers missed a record number of days of work in 2022, new ONS data has revealed. In total, 185.6 million days were lost across the workforce – equivalent to 5.7 days per worker. It’s the highest number of sick days per worker since 2005, and the largest number overall since records began in the 1990s.
Minor illness was the most common reason cited by employees, making up nearly a quarter of all missed days. It was followed by musculoskeletal problems and mental health conditions. However, respiratory illness saw the largest jump year-on-year. In total, 16.2 million workdays were missed for this reason: a 60% increase on 2021. Covid is officially counted by the ONS under ‘other’; however, the survey authors note people may have self-reported it as a respiratory condition.
The statistics have highlighted the worsening health of the British labour force, particularly post-pandemic. Half a million more people are out of work due to a long-term health condition than in 2019, while observers fear NHS backlogs are leading to delays in treatment that can exacerbate health problems.
Meanwhile, separate research from the Institute for Public Policy Research (IPPR) released yesterday found the rising numbers signed off on long-term sick leave is costing the UK £43bn per year, or 2% of GDP. Alongside sluggish productivity and an economy that’s lagging behind other major countries, the 1970s moniker for the UK of “the sick man of Europe” is looking increasingly accurate.