CMA Gives Tentative Approval to Microsoft's Restructured Acquisition of Activision Blizzard

The United Kingdom's Competition and Markets Authority (CMA) has recently given its preliminary approval of the merger between two gaming giants, Microsoft and Activision Blizzard. This news comes as a relief to both companies, as they have been eagerly awaiting a favorable decision from the CMA.

Previously, the CMA had expressed concerns about the potential negative impact of the merger on the cloud gaming market. They feared that the consolidation of power by Microsoft would lead to less innovation and choice for UK gamers. In response to these concerns, Microsoft took a proactive approach and restructured its proposal.

Instead of acquiring the cloud gaming rights of Activision Blizzard, Microsoft chose to divest them to an independent entity, Ubisoft. This move ensures that the important content, including popular games such as Call of Duty, Overwatch, and World of Warcraft, remains outside of Microsoft's control in relation to cloud gaming.

The CMA acknowledges that this revised deal addresses their initial concerns. By selling Activision's cloud streaming rights to Ubisoft, Microsoft is no longer in a position to limit access to their cloud gaming services or withhold Activision games from competitors. Ubisoft, as an independent player, will have the freedom to offer Activision games directly to consumers and other cloud gaming service providers, promoting healthy competition within the market.

The Road Ahead

While the CMA's preliminary approval is a significant step forward, the deal is not yet completely approved. The CMA will now enter a consultation period to gather feedback on residual concerns surrounding Ubisoft's control of cloud gaming rights. They will evaluate whether this control could be circumvented, terminated, or not properly enforced.

Microsoft has already offered additional remedies to address these concerns and ensure fair competition. The consultation period is set to conclude on October 6th, after which the CMA will make its final decision. The merger is scheduled to close on October 18th.

Reactions from the Industry

The news of the CMA's preliminary approval has sparked excitement among industry leaders. Microsoft President Brad Smith took to Twitter to express his enthusiasm, highlighting the positive impact the merger will have on the future of gaming.

Activision Blizzard CEO Bobby Kotick also released a heartfelt message to his employees, sharing his optimism and gratitude for their commitment throughout the merger process. He emphasized that this merger will unlock new opportunities for creativity and excellence in game development.

• Conclusion

The preliminary approval from the CMA represents a significant milestone for Microsoft and Activision Blizzard. It demonstrates that the revised deal addresses the concerns raised by the regulatory authority, and paves the way for a successful merger.

The consultation period will provide an opportunity for the CMA to thoroughly evaluate any remaining concerns, ensuring that fair competition is upheld in the cloud gaming market. With the expected closing of the merger on the horizon, both Microsoft and Activision Blizzard are excited about the future of gaming and the opportunities this partnership will bring.

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