UK Competition Authority Approves Microsoft’s $69 Billion Takeover of Activision Blizzard
The Competition and Markets Authority (CMA) in the UK has given the green light to Microsoft’s proposed $69 billion acquisition of gaming firm Activision Blizzard. This approval removes the final major hurdle for the deal to close.
Microsoft first proposed the takeover of Activision Blizzard in January 2022 but has faced regulatory challenges in the US, Europe, and the UK. Regulators were concerned that the acquisition would reduce competition in the gaming market, particularly in the emerging field of cloud gaming.
The CMA’s approval of the deal comes with one condition, Microsoft will not have cloud gaming rights. The regulator stated that this condition would prevent Microsoft from monopolizing the cloud gaming market and ensure competitive prices and services for UK cloud gaming customers.
The CMA was the last major regulator holding up the deal, signaling a significant U-turn since its previous decision to block the acquisition. The regulator had initially raised concerns about Microsoft gaining a strong position in the nascent cloud gaming market.
In an effort to address these concerns, Microsoft offered concessions, including divesting the cloud rights of Activision games to French game publisher Ubisoft Entertainment. The CMA stated that this divestment would allow Ubisoft to offer Activision’s content under any business model and reduce costs and increase efficiency for cloud gaming providers.
Various regulators globally expressed concerns about the potential reduction of competition in the gaming market, particularly in cloud gaming. There were also fears that Microsoft could make key Activision games exclusive to Xbox and other Microsoft platforms.
Cloud gaming is viewed as the future of the industry, offering subscription services that allow users to stream games without the need for expensive consoles. The UK regulator argued that blocking the deal in April was necessary to preserve competition in the nascent cloud gaming market.
The EU was the first major regulator to clear the deal in May after Microsoft made concessions. In the US, the Federal Trade Commission’s attempt to block the acquisition was ultimately blocked by a judge in July.
Now that the UK regulator has approved the deal, Microsoft is expected to be able to close the acquisition. Microsoft President Brad Smith expressed gratitude for the CMA’s review and decision, stating that the acquisition will benefit players and the gaming industry worldwide.
Activision Blizzard CEO Bobby Kotick also expressed excitement for the next chapter with Microsoft, highlighting the endless possibilities for employees and players alike.
Throughout the regulatory process, Microsoft has been trying to assure regulators and competitors that it will not make games exclusive. The company has signed deals with Nvidia and Sony to bring Xbox games to their platforms, emphasizing its commitment to collaboration and widespread access to games.