In a positive turn of events, Microsoft’s revised offer to acquire Call of Duty maker Activision Blizzard has been given a green light by the UK’s Competition Markets Authority (CMA). The CMA stated that the new proposals put forward by Microsoft have addressed the concerns that had previously led to the blocking of the initial $69 billion deal. One of the major changes in the revised deal is Microsoft’s decision to not purchase the cloud gaming rights owned by Activision Blizzard.
Earlier this year, the CMA had raised concerns about the potential harm the deal could cause to competition in cloud gaming in the UK, leading to the rejection of the original merger plan. However, with the revised deal, Microsoft seems to have made significant concessions to address these concerns. The CMA’s chief executive, Sarah Cardell, emphasized that the preservation of competition, innovation, and choice in cloud gaming was the key factor for the CMA’s approval. The CMA will now open a consultation period before making a final decision on the deal.
If the deal eventually receives final approval, it will mark the end of a tumultuous year-and-a-half for Microsoft, as the merger has faced regulatory challenges worldwide. Despite the setbacks, Microsoft remains optimistic that the acquisition of Activision Blizzard will ultimately benefit its Xbox console and gaming subscription business, driving up demand and expanding its market share.
One notable aspect of the revised deal is Microsoft’s agreement to transfer the rights to stream Activision games from the cloud to French video games publisher Ubisoft for a period of 15 years. This means that popular games such as Call of Duty, Overwatch, and World of Warcraft will not fall under Microsoft’s control for cloud streaming. Instead, Ubisoft will become the independent supplier responsible for the cloud distribution of these games.
Brad Smith, Microsoft’s vice chairman and president, expressed his satisfaction with the positive step taken by the CMA and stated that the company had presented solutions that fully addressed the CMA’s concerns regarding cloud game streaming. Microsoft aims to obtain approval and finalize the deal before the 18th of October deadline.
While the CMA acknowledged having some residual concerns, it pointed out that the revised deal is significantly different from the original proposal and ensures that the cloud distribution of important games remains in the hands of a strong independent supplier like Ubisoft rather than being under Microsoft’s control. This development was welcomed by Activision, with the company viewing the preliminary approval as “great news” for its future collaboration with Microsoft and expressing its commitment to completing the regulatory review process.
This revised bid by Microsoft marks a critical milestone in the efforts to acquire Activision Blizzard. The world is now waiting for the final decision of the CMA in October, as it holds the power to determine whether the deal can proceed on a global scale. For Microsoft, this deal represents a strategic move to solidify its position in the gaming industry and leverage the popularity of renowned gaming franchises like Call of Duty. If approved, this acquisition has the potential to reshape the gaming landscape and fuel further innovation in the cloud gaming space.
