The UK’s Competition and Markets Authority (CMA) has released a new statement on its probe into Microsoft’s proposed acquisition of Activision Blizzard. The $68.7 billion deal is now as close to approval as possible.
On September 22, the CMA announced in a press release that Microsoft’s offer to sell cloud gaming rights for Activision Blizzard games to Ubisoft “substantially addresses previous concerns and opens the door to the deal being cleared.”
The regulator noted that the new restructured deal should maintain open competition in the cloud gaming market. However, it still has residual concerns that certain provisions of transfering rights to Ubisoft “could be circumvented, terminated, or not enforced.”
Microsoft has already offered remedies on the matter, and the CMA will consult on them and collect third-party feedback until October 6.
“This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft,” CMA senior director of mergers Colin Raftery said in a statement.
The CMA initially blocked the Activision Blizzard deal in April over cloud gaming concerns. It believed that the merger would give Microsoft an unfair advantage in the cloud gaming market through obtaining full rights to successful IPs like Call of Duty, Overwatch, and World of Warcraft.
The transaction has since been approved by all other regulators globally, including the European Commission. Microsoft also won a legal fight against the US Federal Trade Commission, but the CMA remained adamant.
That’s why the company announced its move to transfer cloud gaming rights to all current and new Activision Blizzard titles released over the next 15 years to Ubisoft. Under this agreement, Microsoft won’t be able to launch Activision games exclusively on its Xbox Cloud Gaming service or control licensing terms for rival services.
How did Microsoft and Activision react to the news?
Microsoft president Brad Smith issued a statement on X (Twitter), saying that the company is encouraged by the positive development in the CMA’s review process. “We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline,” he noted.
We are encouraged by this positive development in the CMA’s review process. We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18…
— Brad Smith (@BradSmi) September 22, 2023
Activision Blizzard CEO Bobby Kotick sent an email to employees, referring to the CMA’s decision as a “preliminary approval” of the merger.
“This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators,” he said. “I remain optimistic as we continue the journey toward completion and am very grateful to each of you for your dedication and focus throughout this process.”
In July, Microsoft and Activision extended their merger deadline to October 18. Given the regulator’s latest statement, it can be assumed that the $68.7 billion deal has now every chance of closing before this date.