Microsoft’s ongoing efforts to acquire Activision Blizzard for $69 billion are inching closer to realization as the UK’s Competition and Markets Authority (CMA) granted preliminary approval, marking a significant development in the merger’s progress. Thus, it will be easing up the acquisition of Blizzard.
Summary
- Microsoft’s $69 billion acquisition of Activision Blizzard received preliminary approval from the UK’s CMA.
- Activision Blizzard’s strategic sale of streaming rights to Ubisoft addresses concerns the Competition and Markets Authority raised.
- Microsoft offers remedies to address remaining concerns related to cloud game streaming.
- The acquisition gains momentum, with final approval expected before the October 18 deadline.
Originally announced in early 2022, the acquisition faced setbacks when the UK’s competition regulator expressed concerns about Microsoft gaining excessive control over the emerging cloud gaming market. However, in a recent twist, Activision Blizzard strategically sold its streaming rights to Ubisoft Entertainment, a decision to address the Competition and Markets Authority’s apprehensions.
In response to this new development, the CMA stated that the Ubisoft divestment “substantially addresses previous concerns.” While the regulatory body identified some lingering reservations, Microsoft presented remedies that, according to the CMA, should effectively resolve these issues.
Microsoft expressed encouragement regarding the positive turn of events in the CMA’s review process. The company proposed solutions that comprehensively address the CMA’s remaining concerns, primarily related to cloud game streaming. Microsoft President Brad Smith stated their commitment to gaining approval before the October 18 deadline.
Activision Blizzard, the creator of popular titles such as “Call of Duty,” “World of Warcraft,” and “Overwatch,” welcomed the preliminary approval, emphasizing its positive implications for its future with Microsoft.
In response to this news, stock markets reacted positively, with Activision shares rising by 1.6%, Microsoft seeing a 0.3% increase in U.S. premarket trading, and Ubisoft gaining 3.6% in Paris.
While the European Union had previously approved the deal in May, accepting Microsoft’s commitment to license Activision’s games to other platforms, the UK had initially rejected the same remedies. In the United States, the Federal Trade Commission has opposed the acquisition of Blizzard but has been unsuccessful in blocking it.
The CMA’s decision to revisit the case after its initial block represents a significant departure from standard procedure. Still, the regulatory body emphasized that Microsoft’s substantial restructuring of the deal was pivotal in addressing its concerns. CMA Chief Executive Sarah Cardell noted that Microsoft’s proposal should have been presented during the initial investigation, underlining the importance of timely and credible remedies in merger deals.
Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, acknowledged that conceding cloud gaming rights was a significant concession for Microsoft but necessary to secure the deal’s approval. She expressed confidence that this decision marks the final obstacle in the acquisition process.
Although “residual concerns” remain regarding the Ubisoft deal, Microsoft has offered remedies to ensure the terms of the sale remain enforceable. The CMA solicits feedback on these proposed remedies from third parties, with a final decision expected before the extended October 18 deadline.
As this acquisition unfolds, it draws attention to the evolving dynamics between competition regulators and “Big Tech” companies, a trend that will likely persist and attract significant scrutiny. What are your thoughts about this recent development? Let us know your thoughts in the comments section.
Next Up: Leaked FTC Documents From Microsoft Details On Bethesda’s Release Schedule.
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A quintessential gamer and masterful wordsmith with an academic foundation in undergraduate studies, immersed constantly in the realms of Action-adventure, Stealth, and Nonlinear gameplay. With recent endeavors in News Writing, I embark on the odyssey to explore and articulate the gaming multiverse, just gaming my way through the cosmos. While not writing, you can find me on Steam: PrinceRoyalKnight
