Microsoft and Activision Blizzard acquisition approved by UK regulator CMA

Britain’s top competition watchdog gave the go-ahead on Friday. To Microsoft Proposal to buy gaming company for $69 billion activision blizzardremoving the last major hurdle to closing a deal.

The Competition and Markets Authority has announced that Microsoft has signed a deal to acquire Activision, but without cloud gaming rights.

The regulator said in a statement on Friday: “The new agreement will prevent Microsoft from locking in competition as the cloud gaming market takes off, and will maintain competitive prices and services for UK cloud gaming customers. I can do that.”

The CMA became the last regulator to maintain the deal. Microsoft should now be able to complete the acquisition.

The decision marks a significant shift in direction from the CMA, which has been the acquisition’s staunchest critic, saying earlier this year that the acquisition would not stifle competition in the nascent cloud gaming market. The acquisition was effectively blocked due to concerns that

Microsoft first proposed acquiring Activision in January 2022, but has since faced regulatory challenges in the US, Europe and the UK.

CMA announced in July that it would consider a restructuring acquisition from Microsoft to allay concerns. Microsoft offered a series of concessions centered around selling cloud rights to Activision games to French game publisher Ubisoft Entertainment.

“This will allow Ubisoft to offer Activision content in any business model, including multi-game subscription services. It will also allow cloud gaming providers to use non-Windows operating systems for Activision content. , reducing costs and increasing efficiency,” the CMA said.

Regulators around the world were concerned that the acquisition would reduce competition in the gaming market, particularly around cloud gaming. Microsoft could also make major Activision games like “Call of Duty” exclusive to Xbox and other Microsoft platforms, the people claimed.

Cloud gaming is seen as the next frontier in the industry, offering subscription services that allow you to stream games just like movies and shows. Netflix. It could even eliminate the need for expensive consoles and allow users to play games on PC, mobile, or TV instead.

Specifically, when British regulators blocked the deal in April, they argued that allowing it to proceed would give Microsoft a strong position in the nascent cloud gaming market.

European Union authorities became the first major regulator to approve the deal in May after Microsoft offered concessions to the EU.

At the time, the CMA said it supported its original decision to block the deal because the compromise presented to the EU would allow Microsoft to “set the terms of this market for the next 10 years”.

Meanwhile, in the United States, the Federal Trade Commission was engaged in a legal battle with Microsoft in an attempt to reverse the acquisition of Activision. But a judge blocked the FTC’s effort in July, clearing the way for the deal to move forward in the United States.

Just hours later, the CMA allayed the regulator’s concerns, saying it was “ready to consider any proposals from Microsoft to restructure the transaction”.

In August, Microsoft offered concessions to the CMA in a second attempt to close the deal.

Under the restructured deal, Microsoft will not acquire cloud rights to Activision’s existing PC and console games or any new games released by Activision for the next 15 years. Instead, those rights will be sold to Ubisoft Entertainment prior to Microsoft’s acquisition of Activision, according to the CMA.

“By selling Activision’s cloud streaming rights to Ubisoft, we are ensuring that Microsoft cannot strangle this important and rapidly evolving market,” CMA CEO Sara Cardel said in a statement. I did,” he said.

“As cloud gaming grows, this intervention will ensure people have more competitive prices, better service and more choice. We are the only competitive agency.”

While Britain approved the deal, the CMA, which has become increasingly active in scrutinizing big mergers, slammed the tech giant’s negotiating tactics and bid farewell to Microsoft.

“Companies and their advisors have no doubt that the tactics employed by Microsoft are not the way to engage with the CMA,” Cardel said.

“Microsoft had the opportunity to reorganize during our initial investigation, but instead continued to insist on a series of countermeasures that we told were completely ineffective. It’s just a waste of time and money.”

The CMA became the last major regulator to block the Activision acquisition.

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

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

“We’re excited about this next chapter with Microsoft and the endless possibilities it creates for you and our players,” Activision Blizzard CEO Bobby Kotick told employees in an email.

While the regulatory investigation was underway, Microsoft has been trying to show regulators and its closest competitors that it will not make the game proprietary.

American technology giant signed a deal to offer Xbox games in February. Nvidia’s Signed a 10-year agreement to provide cloud gaming services and Call of Duty. Nintendo On the same day as Xbox, we can now offer a player with “full functionality and content parity.”Microsoft also signed a deal with its biggest rival in July. Sony This is to bring Call of Duty to the Japanese company’s PlayStation game console.