Britain’s Competition and Markets Authority (CMA) has granted approval to Microsoft’s proposed $69 billion takeover of gaming company Activision Blizzard, removing the final major obstacle for the deal to close. The approval comes with certain conditions, as the CMA has cleared the deal for Microsoft to buy Activision but without cloud gaming rights.
The CMA stated that the new deal prevents Microsoft from dominating the cloud gaming market, ensuring competitive prices and services for UK cloud gaming customers. It allows other companies, such as Ubisoft, to offer Activision’s content under various business models, including through multi-game subscription services. The deal also ensures that cloud gaming providers can use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.
This decision marks a significant reversal by the CMA, which had been a strong critic of the takeover and had effectively blocked the deal earlier over concerns about competition in the nascent cloud gaming market. Microsoft initially proposed the acquisition in January 2022 but faced regulatory challenges in the US, Europe, and the UK.
In July, the CMA indicated that it would reconsider a restructured acquisition from Microsoft, and the tech giant offered concessions, including divesting the cloud rights of Activision games to Ubisoft. The CMA agreed to revisit the deal, and with the latest approval, Microsoft has successfully navigated regulatory challenges in the UK.
The global regulatory concerns revolved around potential reduced competition in the gaming market, especially in cloud gaming. There were worries that Microsoft could make key Activision games exclusive to Xbox and other Microsoft platforms, impacting competition in the industry. Cloud gaming is considered the next frontier in the gaming industry, offering subscription services that enable streaming games on various devices without the need for expensive consoles.
While the EU and the UK have now approved the deal, the US Federal Trade Commission had previously fought against it. However, a judge blocked the FTC’s attempt to stop the deal in July, clearing the way for the acquisition to proceed in the US.
