The Microsoft-Activisson acquisition of Blizzard has been approved by the UK regulator CMA

  • England’s Competition and Markets Authority has given the green light to Microsoft’s proposed $69 billion takeover of gaming giant Activision Blizzard, clearing the last major hurdle to the deal closing.
  • Microsoft first proposed acquiring Activision Blizzard in January 2022, but has since faced regulatory challenges in the US, Europe and the UK.
  • Regulators expressed concern that the acquisition would reduce competition in the gaming market, particularly around the nascent area of ​​cloud gaming.

The Microsoft logo is seen on a smartphone placed over the Activision Blizzard logo shown in this illustration taken on January 18, 2022.

Ruvik Dice | Reuters

Britain’s top competition watchdog has given the green light to Microsoft’s proposed $69 billion takeover of gaming giant Activision Blizzard, clearing the last major hurdle to closing the deal.

The Competition and Markets Authority said it had cleared a deal to buy Microsoft Activision, but without the cloud gaming rights.

“The new deal will prevent competition in Microsoft cloud gaming and will protect competitive prices and services for UK cloud gaming customers as this market takes off,” the regulator said in a statement on Friday.

The CMA was the final regulator to uphold the agreement. Microsoft can now close the acquisition.

The decision marks a major U-turn from the CMA, a staunch critic of the acquisition, which effectively blocked the deal earlier this year over concerns that the acquisition would stifle competition in the nascent cloud gaming market.

Microsoft first offered to buy Activision in January 2022, but has since faced regulatory challenges in the US, Europe and the UK.

See also  Global iPhone shipments are down nearly 10% as Apple's 2024 woes continue

In July, the CMA said it was considering a restructured takeover from Microsoft. Microsoft made several offers, one of which centered on transferring the cloud rights of Activision games to French game publisher Ubisoft Entertainment.

“This will allow Ubisoft to offer Activision’s content under any business model, including multigame subscription services. It will also help ensure that cloud gaming providers can use non-Windows operating systems for Activision content, reducing costs and increasing efficiency,” CMA said.

Regulators worldwide expressed concern that the acquisition would reduce competition in the gaming market, particularly around cloud gaming. Officials argued that Microsoft could take major Activision games like Call of Duty and make them exclusive to Xbox and other Microsoft platforms.

Cloud gaming is considered the next industry frontier, offering subscription services that allow people to stream games like movies or shows on Netflix. This will eliminate the need for expensive consoles and users will instead play games on PCs, mobiles and TVs.

In particular, when the UK regulator blocked the acquisition in April, it argued that allowing the deal to proceed would give Microsoft a stronger position in the nascent cloud gaming market.

Officials in the European Union became the first major regulator to finalize the deal in May after Microsoft made concessions to the EU.

At the time, the CMA said it was in its initial decision to block the deal because the compromises submitted to the EU would allow Microsoft to “set the terms and conditions for this market for the next ten years”.

See also  Meet the Republicans running for Speaker of the House

Meanwhile, in the US, the Federal Trade Commission is engaged in a legal battle with Microsoft in an attempt to derail the Activision acquisition. In July, however, a judge blocked the FTC’s effort, allowing the deal to proceed in the United States.

Hours later, the CMA said it was “ready to consider any proposals from Microsoft to restructure the transaction” and allayed the regulator’s concerns.

In August, Microsoft made offers to CMA, allowing the contract on its second attempt.

Under the restructured transaction, Microsoft will not acquire cloud rights to existing Activision PC and console games or new games released by Activision over the next 15 years. Instead, according to the CMA, these rights will be transferred to Ubisoft Entertainment before Microsoft acquires Activision.

“With the sale of Activision’s cloud streaming rights to Ubisoft, we have ensured that Microsoft cannot retain control of this important and fast-growing market,” CMA CEO Sarah Cordell said in a statement.

“As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choices. We are the only competitive company globally to deliver this result.”

Although the UK approved the deal, the CMA has grown increasingly aggressive in its moves to investigate major mergers, creating a rift for Microsoft in which it slammed the tech giant’s negotiating tactics.

“Businesses and their advisors should be in no doubt that the tactics used by Microsoft are no way to engage with the CMA,” Kartell said.

“During our initial investigation Microsoft had the opportunity to restructure, but instead continued to insist on a set of measures that we said wouldn’t work. Dragging out measures this way would only waste time and money.”

See also  World Baseball Classic 2023 Predictions from Experts

CMA is the last major regulator to acquire Activision.

Microsoft president Brad Smith said on X, formerly known as Twitter, that he was “grateful” for the CMA’s review and decision.

“We have now cleared the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide,” Smith said.

Activision Blizzard CEO Bobby Kotick said in an email to employees that he is “excited for our next chapter in partnership with Microsoft and the endless possibilities it will create for you and our players.”

Throughout the regulatory probe, Microsoft has tried to show that it will not make games exclusive to regulators and its closest competitors.

The US tech giant signed a deal in February to bring Xbox games to Nvidia’s cloud gaming service, and Nintendo struck a 10-year deal to bring Call of Duty to players on the same day as Xbox with a “full feature and content balance”. In July, Microsoft struck a deal with its biggest rival Sony to bring Call of Duty to the Japanese company’s PlayStation gaming console.

Leave a Reply

Your email address will not be published. Required fields are marked *