On October 13th, the UK’s Competition and Markets Authority (CMA) gave its final approval for Microsoft’s acquisition of Activision Blizzard, valued at nearly $69 billion. This comes after a prolonged process that saw several regulatory hurdles, including an initial blocking of the deal by the CMA due to concerns over the cloud gaming market.
In January 2022, announced its intention to acquire leading video game developer and publisher Activision Blizzard for $69 billion. The deal represents one of the largest acquisitions in gaming history and would give control over some of the most iconic gaming franchises, including Call of Duty, Overwatch, Diablo and World of Warcraft.
Microsoft’s goal with the acquisition is to expand its gaming business and gain access to Activision Blizzard’s vast player network. The tech giant also aims to leverage Activision’s content across its Xbox consoles, Windows PCs, and mobile devices to advance its cloud gaming ambitions.
Regulators Voice Concerns About Reduced Competition
The blockbuster deal immediately faced scrutiny from regulators worldwide concerned that the acquisition could harm competition, especially in emerging areas like cloud gaming. Key concerns focused on Microsoft potentially making Activision games exclusive to Xbox and platforms, limiting options for consumers.
The UK’s Competition and Markets Authority (CMA) emerged as one of the main regulatory hurdles for the takeover. In April, the CMA officially blocked the deal, stating that could damage rivals by restricting access to Activision’s games. The regulator specifically cited risks to competition in cloud gaming services.
Microsoft Restructures Deal to Address Regulatory Concerns
In response to the regulatory backlash, M.S offered concessions in July to assuage antitrust worries. Notably, agreed to contractual arrangements to guarantee Call of Duty’s availability on Nintendo and Sony platforms with full parity on content and features.
Microsoft also agreed to divest Activision’s cloud gaming rights to French publisher Ubisoft and committed to not withholding games from rival cloud services. These concessions opened the door for the CMA to reconsider the acquisition.
Throughout the review process, the CMA accused M.S of uncooperative negotiation tactics, insisting on unworkable solutions that prolonged regulatory scrutiny. The regulator said passed on opportunities to address concerns during the initial probe.
Final Regulatory Approval Secured in the UK
With Microsoft’s concessions satisfying its competition concerns, the CMA gave final approval for the restructured acquisition in late On October 13th,2023. M.S Executive Brad Smith thanked the CMA for its thorough review of the deal.
Microsoft Commits to Keeping Top Games Multiplatform
Aiming to further assuage regulatory worries, Microsoft signed agreements with Nintendo, Sony and Nvidia to keep Call of Duty and other Activision titles on competing platforms. Microsoft maintains it has no incentive to restrict Activision’s popular games to Xbox ecosystems.
Beyond the UK, overcame regulatory hurdles in other key markets. The acquisition was approved in the European Union in May following Microsoft’s pledges around game availability. In the US, a court dismissed the FTC’s antitrust lawsuit against the deal in July.
Cloud Gaming Seen as Key Motivator
Industry experts point to the emerging cloud gaming market as a major factor behind Microsoft’s willingness to spend huge sums on content from Activision Blizzard. Cloud gaming allows users to stream games anytime on any device with an internet connection, potentially disrupting the traditional console model.
Activision Blizzard CEO Bobby Kotick believes the acquisition will benefit the company’s employees and players. For its part, maintains the deal will spur competition and bring more games to more people worldwide.
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