What happened
Wednesday will not go down as a great day in video game industry history. Take-Two Interactive (TTWO +0.41%) fell by over 4% in value, due in no small part to a regulatory decision across the Atlantic Ocean that directly impacted a big peer. Take-Two's fall was steeper than that of the S&P 500 index on the day, which slipped by a relatively light 0.4%.
So what
The big peer is Activision Blizzard (ATVI +0.00%), the buyout target of 300-pound tech-sector gorilla Microsoft (MSFT +2.11%). On Wednesday, the U.K.'s Competition and Markets Authority (CMA) blocked the mega-merger "over concerns the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for U.K. gamers over the years to come."
Both Microsoft, which is itching to get its hands on a prominent video game publisher and developer, and eager-for-a-premium-buyout Activision said they would contest the decision. It isn't easy to fight the ruling of a strong and determined regulator, however, and Microsoft has a spotty history with such efforts.
The CMA decision doesn't directly affect Take-Two Interactive, but it doesn't have to. Video game stocks are now, by default, less attractive than previously because they're turning out to be less-than-ideal acquisition targets... at least if they're large enough and being pursued by giants in the tech industry.
NASDAQ: TTWO
Key Data Points
Now what
In Take-Two's case, Wednesday's sell-off was unwarranted. No, the company probably won't be bought out by an eager suitor with deep pockets anytime soon. Yet it has a fine lineup of titles, many of which are hooked into franchises with masses of dedicated players. Perhaps today's share-price slide is a fine opportunity to load up on the stock at a discount.
