The UK’s Competition and Markets Authority (CMA) has given the final approval for Microsoft’s massive acquisition of Activision-Blizzard, the maker of popular video games such as Call of Duty and World of Warcraft, Friday morning. A huge deal as it was the final hurdle between Microsoft and closing the deal to acquire the company.
The CMA had initially moved to block the $69 billion deal in April, citing concerns that Microsoft, which owns the Xbox gaming console, would dominate the emerging cloud gaming market and harm competition and consumers.
However, Microsoft offered a concession in August that would see Ubisoft, a French rival of Activision Blizzard, buy the cloud gaming rights for all of Activision Blizzard’s PC and console content produced over the next 15 years outside the European Economic Area (EEA).
The CMA said that this concession addressed its concerns and allowed Ubisoft to offer Activision Blizzard’s content under any business model, including through multi-game subscription services. It also ensured that cloud gaming providers would be able to use non-Windows operating systems for Activision Blizzard’s content, reducing costs and increasing efficiency.
Sarah Cardell, chief executive of the CMA, said: “With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market. As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice.”
The CMA also said that it was the only competition agency globally to have delivered this outcome and that it was not influenced by political pressure or corporate lobbying.
Microsoft announced its intention to buy Activision Blizzard in January 2022, in one of the biggest deals in the gaming industry. The deal was approved by the EU regulators in June 2022, after Microsoft offered alternative concessions on cloud gaming rights. The US Federal Trade Commission (FTC) is still opposing the deal but failed to secure a court injunction to stop it.
Microsoft said that it was pleased with the CMA’s decision and that it looked forward to completing the transaction soon. It said that the deal would benefit gamers, developers and publishers by creating more opportunities for innovation and creativity.
The acquisition agreement with Activision Blizzard had been due to expire on 18 October. The UK regulator had appeared increasingly isolated in its position blocking the takeover after its EU counterparts passed the deal12 and the US competition regulator failed to secure a court injunction to stop it3.