UK approves Activision-Blizzard deal between Activision and Blizzard and Microsoft, with major concession

The UK’s Competition and Markets Authority (CMA) has given the green light to Microsoft’s acquisition of Activision-Blizzard, the gaming giant behind popular franchises such as Call of Duty, World of Warcraft and Overwatch, for $68.7 billion. However, the approval comes with one important condition: Microsoft must ensure that Activision-Blizzard’s games remain available on rival platforms, such as Sony’s PlayStation and Nintendo’s Switch.

The CMA said it had conducted an in-depth investigation into the proposed merger, which was announced in January 2022, and found that it could harm competition and consumers in the UK video games industry. The CMA said Microsoft and Activision-Blizzard are two of the world’s largest and most successful video game publishers, and their combined market power could allow them to restrict access to their games or raise prices for consumers on other platforms.

The CMA also said it had considered the potential impact of the merger on video game development and innovation, as well as the diversity and quality of content available to gamers. The CMA said it had received submissions from various stakeholders, including publishers, developers, platform owners and rival consumer groups, expressing concern about the merger.

To address these concerns, the CMA has imposed a legally binding behavioral remedy on Microsoft, requiring it to continue to supply Activision-Blizzard games to other platforms on fair and reasonable terms. The CMA said this remedy will ensure that consumers can continue to enjoy a wide variety of games on different platforms and that competition and innovation in the video game industry will be preserved.

The CMA’s decision follows similar approvals from other regulators around the world, including the U.S. Federal Trade Commission, the European Commission and China’s State Administration of Market Regulation. The merger is expected to close in early 2023, subject to the satisfaction of other customary closing conditions.

Microsoft welcomed the CMA’s approval and said it is committed to complying with the settlement. Microsoft also said it is excited to join forces with Activision-Blizzard and create more amazing gaming experiences for its customers. Activision-Blizzard also expressed its appreciation to the CMA and said it looks forward to becoming part of the Microsoft family of games.

Microsoft’s Activision Blizzard deal gets green light from U.K. regulator after major changes

Microsoft has cleared a major hurdle in its bid to acquire Activision Blizzard, the gaming giant behind popular franchises such as Call of Duty, World of Warcraft and Candy Crush. The UK’s Competition and Markets Authority (CMA) approved the deal after Microsoft agreed to sell the cloud streaming rights to Activision Blizzard games to Ubisoft, another leading game publisher.

The CMA had previously expressed serious concerns about the deal, which is worth $68.7 billion and would create the world’s largest gaming company. The regulator feared Microsoft would use its dominant position in the cloud gaming market, where games are streamed over the Internet rather than downloaded or played on a console, to stifle competition and innovation. Cloud gaming is seen as a key growth area for the industry, as it allows gamers to access high-quality games on any device without the need for expensive hardware.

To address these concerns, Microsoft offered a number of solutions, including licensing some of its own games to rival cloud platforms, maintaining fair and reasonable terms for developers using its cloud services, and ensuring interoperability and cross-play between different devices and platforms. However, the CMA rejected these proposals as insufficient and threatened to block the deal unless Microsoft made more substantial concessions.

In a surprising move, Microsoft approached Ubisoft, one of its main competitors in the gaming market, and offered to sell them the cloud streaming rights to all current and future Activision Blizzard games for the next 15 years. Ubisoft, owner of popular franchises such as Assassin’s Creed, Far Cry and Just Dance, accepted the deal, which gives them access to a huge library of games that they can stream on their own cloud platform, Ubisoft+, as well as on other platforms they partner with.

The CMA welcomed this development and said it would effectively address its competition concerns. «This is a significant change to the original agreement that ensures Microsoft will not be able to use its acquisition of Activision Blizzard to harm competition in the cloud gaming market,» said Sarah Cardell, CMA executive director. «By selling the cloud streaming rights to Activision Blizzard’s games to Ubisoft, Microsoft has created a strong rival that will challenge its dominance and offer more choice and innovation to gamers.»

Cardell also warned other companies planning mergers in the future not to repeat Microsoft’s mistakes. «Microsoft tried to push through a deal that would have given it too much power over a vital and growing sector of the economy. It ignored our repeated warnings and offered remedies that were clearly inadequate. This only delayed the process and increased costs for everyone. «We urge companies and their advisors to engage with us constructively and early in any merger process.»

Meanwhile, Activision Blizzard CEO Bobby Kotick expressed his satisfaction with the outcome of the CMA investigation. In an email to his employees, he said, «We are delighted that the CMA has approved our transaction with Microsoft. This is a historic moment for our company and our industry. Together with Microsoft, we will be able to reach more gamers around the world. world with our amazing games and create even more memorable experiences for them.»