After a tumultuous saga spanning nearly two years, Microsoft can finally seal its mega Activision Blizzard deal, well, almost. The UK’s Competition and Markets Authority is set to approve the acquisition after the Xbox maker submitted a revised proposal two months ago.
Club386 has been following the saga since the deals inception back in early 2022, and the UK regulator has played a major role in preventing it from going forward, blocking the acquisition in April of this year when it concluded “the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.”
Additionally, concerns over the future of high-profile titles such Call of Duty, Overwatch and World of Warcraft were also cited in the initial CMA report, and the same sentiment was echoed across the globe by the European Commission, the Japanese FTC and US FTC, as well as Xbox’s biggest rivals, Sony and Nintendo. This sent Microsoft into PR overdrive, brokering multiple 10-year commitment deals with the likes of Nvidia and EE in a bid to appease anti-competitive regulators, and it worked, for the most part.
Nonetheless, after Microsoft appealed and overturned the US FTC request to halt the transaction, the UK’s CMA agreed to reconsider a modified proposal put forward by the company and has now reached a conclusion.
Today, the CEO of the CMA, Sarah Cardell, confirmed the following, “The CMA’s position has been consistent throughout – this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved. In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns.
“It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”
So, even though a few petty jabs were thrown at Microsoft in that statement, it seems the CMA is happy with the latest proposal. Under the newly restructured deal, Microsoft will now sell the streaming rights for all Activision Blizzard games released in the next 15 years to none other than Ubisoft.
The CMA hopes that this will result in maintaining open competition for the nascent cloud gaming market over the coming years. However it has “residual concerns that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced.”
In a bid to allay these lingering concerns, Microsoft says it will provide remedies to ensure the terms of sale for Activision’s cloud streaming rights are enforceable. This remains the final hurdle for Microsoft to address and the CMA will now consult on these remedies over the next few weeks, reaching a final decision on October 6. Until then, folks!