Microsoft’s Acquisition of Activision Blizzard Provisionally Greenlit by UK Regulator

Following concerns raised by the United Kingdom’s Competition and Markets Authority (CMA) over Microsoft’s $69 billion bid for Activision Blizzard, the software giant has reshaped the deal in a way that satisfies many of the CMA’s earlier apprehensions. Here’s a comprehensive breakdown of the events leading to this provisional approval.

Earlier this year, the CMA blocked Microsoft’s intention to acquire Activision Blizzard outright, citing potential adverse effects on competition in the UK’s burgeoning cloud gaming sector. The primary worry was that Microsoft, which already holds a dominant position in cloud gaming services, might exploit Activision’s rich content library to further entrench its market position, possibly suppressing competition.

Taking the CMA’s feedback to heart, Microsoft reapproached the deal with a strategy designed to address these concerns. In the restructured transaction, Microsoft chose to forgo the acquisition of Activision’s cloud gaming rights. Instead, these rights would be sold to Ubisoft Entertainment SA, a well-regarded independent third-party in the gaming industry. This maneuver ensures that control of cloud streaming rights for high-demand games like Call of Duty and Overwatch doesn’t fall under Microsoft’s purview.

Ubisoft, by acquiring Activision’s cloud gaming rights, assumes the role of a key content provider to cloud gaming services. This mimics the position Activision would have held if it remained autonomous. Ubisoft now has the flexibility to offer Activision’s games directly to consumers and other cloud gaming service providers in any format, be it buy-to-play, multigame subscription services, or any emerging model in the evolving market.

While the CMA recognizes the modified deal’s substantial differences from the original and believes it largely addresses their previous concerns, some minor worries remain. The body expressed that certain aspects of the sale of cloud streaming rights to Ubisoft might be vulnerable to bypass, termination, or lack of enforcement. However, Microsoft has proposed further solutions to ensure the terms of the sale are enforceable, which the CMA has provisionally accepted.

The CMA has since opened a consultation process, slated to run until October 6, to assess Microsoft’s proposed solutions. Full details about the CMA’s statement can be found on their official announcement.

For now, all eyes will be on the upcoming deadline of October 18, which will finalize the proposed acquisition’s approval status. Microsoft President Brad Smith’s recent tweet provides further insights into the company’s perspective on the ongoing review.

Microsoft’s substantial restructuring appears to have made headway in assuaging regulatory concerns. The company’s willingness to adapt showcases the significant value it places on this acquisition. However, as the CMA’s CEO, Sarah Cardell, noted, the process might have been smoother had Microsoft presented this restructured proposal during the original investigation.

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Angel Kicevski

I am ANGE1K. I started playing video games a long time ago. In a blink of an eye, I became a hardcore gamer. A couple of years later, I traversed to the professional Counter-Strike 1.6 scene. After the competitive ERA, I managed to find the gaming industry amusing and started working on FGR. My mission is to lurk and discover secrets, create guides and provide you with some important news. I mostly play FPS and love experimenting in good MMORPGs.

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