Microsoft Corp. faces a sudden challenge to its videogaming ambitions after the U.K. rejected the Xbox maker’s proposed $75 billion acquisition of Activision Blizzard Inc., a regulatory blow that antitrust lawyers say will be hard to overcome.
Microsoft has been pushing to get approvals for the deal—which would be its biggest ever—for more than a year, in part to help it gain an edge in the nascent market for cloud gaming, the Netflix-like streaming of games, and in its mobile gaming business.
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