A sensible play for UK’s ‘open for business’ agenda | Invesloan.com

Good morning. Heck of a scoop from Jim Pickard and Suzi Ring last night: government ministers have forced the resignation of Marcus Bokkerink as chair of the Competition and Markets Authority. Doug Gurr was appointed as the CMA’s new interim chair.

I think this is good news for the UK. It’s bad news for readers because it means today’s newsletter features some perhaps excessive detail about how the UK positions itself as “open for business” and the video game industry more broadly.

Fair play

One of the more damaging decisions taken in the last parliament was the CMA’s decision to block Microsoft’s $75bn acquisition of video-games maker Activision Blizzard. (The regulator approved a revised Microsoft-Activision deal in October 2023.)

The “console wars” are an old, old feature of the gaming industry: manufacturers of gaming consoles such as Sony and Microsoft compete for sales by buying and developing exclusive titles for their platforms. It’s part of what encourages video games companies to innovate, both in terms of the hardware of their consoles and the software that runs on it.

There simply isn’t a god-given right to be able to play Call of Duty on the PlayStation 5 and there is no evidence that the gaming industry will or would have become overly consolidated had future versions of Call of Duty (the jewel in Activision Blizzard’s crown) become exclusive to Microsoft’s X-Box console. Indeed, Microsoft’s whole strategy has been to move away from console exclusives anyway. Phil Spencer, chief executive of Microsoft Gaming, recently hinted to Bloomberg that many of X-Box’s exclusives could expand to PlayStation.

The CMA’s rationale for blocking the deal relied on assumptions about the spread and ubiquity of cloud-based gaming that went beyond anything dreamt of in the sector. The regulator seemed to base its case on wild and unexpected changes both in how consumers choose video games and consoles and how Microsoft tries to make a profit from gaming.

To make matters worse, it meant that the UK’s regulator went further than the EU or the US, despite being a much smaller market. Reactions to it in the UK’s tech sector ranged from “frustrated” to “enraged”.

That isn’t necessarily the fault of its chair, but in making a change at the top, the government has an opportunity to prove that its rhetorical commitment to growth is matched by a serious commitment to getting the right people in place.

Now try this

I was at The Vicious Circle last night, a brilliant new exhibition to mark this year’s Holocaust Memorial Day. You can book tickets here.

Top stories today

• Grim reading for Reeves | The UK government borrowed more than expected in December. Borrowing — the difference between public sector spending and income — was £17.8bn last month, £10.1bn more than in December 2023, and the third highest in any December on record, according to the ONS.

• On borrowed time | Ray Dalio, the billionaire founder of hedge fund firm Bridgewater Associates, has warned that the UK could be heading for a “debt death spiral”, in which it has to borrow more and more money to service its rising interest costs.

• Calling it quits | The UK tax authority “sought to degrade” its telephone helplines and “was willing to let them fail” in its push to drive taxpayers towards online services, a the House of Commons public accounts committee has concluded.

• Speed ahead | The UK has launched a new digital wallet that will allow people to hold driving licences and veteran ID cards on their smartphones, as part of Keir Starmer’s drive to modernise the British state and drive growth.

• American dreams | Former foreign secretary David Miliband has been lobbying Keir Starmer’s Downing Street team to become the UK’s ambassador to the US if Peter Mandelson is knocked out of the running, the i’s Kitty Donaldson reports. The i adds that Donald Trump’s team is proposing putting serious restrictions on his activities in the US if Starmer insists on pushing ahead with his choice of Mandelson.