Microsoft’s long-running pursuit of Activision Blizzard looks set to end in October after the UK finally approved the deal.
In April, the UK’s Competition and Markets Authority (CMA) announced its “Final Report” on the acquisition, citing competition concerns around cloud gaming in the UK. Since then, Microsoft has defeated the U.S.’s Federal Trade Commission (FTC) in court, obtained approval from key regulator the European Commission, and secured an agreement with console rival Sony for the provision of Activision games on PlayStation for a decade.
Then, in August, Microsoft submitted a new Activision Blizzard deal for review after the CMA confirmed the original deal was blocked. This revised deal involves selling off Activision’s cloud gaming rights to Ubisoft, which would be free to port cloud versions of Activision Blizzard games to any platform.
Today, September 22, the CMA said the new deal addresses its previous concerns and “opens the door to the deal being cleared”. Microsoft has an October 18 deadline to deliver the buyout, which now looks inevitable.
The CMA said it had “limited residual concerns” that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced. In response, Microsoft offered remedies to ensure the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA.
The CMA has now provisionally concluded this additional protection should resolve those residual concerns, and is now consulting on the remedies before making a final decision.
Sarah Cardell, CEO of the CMA, criticised Microsoft for not offering this new deal sooner. “The CMA’s position has been consistent throughout – this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved. In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns,” Cardell said.
“It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”
Microsoft president Brad Smith commented: “We are encouraged by this positive development in the CMA’s review process. We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline.”
In an email to employees, Activision Blizzard boss Bobby Kotick called the CMA's approval "critical to completing our merger".
"The next step is for the CMA to gather third-party feedback, after which the CMA will reach a final decision," Kotick said.
"As I said when we announced the deal, this transaction will help us accelerate our ambitions for the future of gaming and enable us to better serve our players. Microsoft recognizes the commitment to excellence and creative independence that has served us well for the last 30 years. I am confident that their resources, technology, and tools will provide us even greater opportunities to create even better games.
"This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators. I remain optimistic as we continue the journey toward completion and am very grateful to each of you for your dedication and focus throughout this process.
As the regulators continue their process, I will keep you updated on our progress towards our expected closing."
Thoughts now turn to Microsoft’s integration of the Activision Blizzard business, and the future of games such as Call of Duty. In an August interview with IGN, Xbox boss Phil Spencer indicated work would need to be done to get Activision Blizzard’s games on Game Pass once the deal closes.
"I want to make sure people know that there's work to actually move games to Game Pass," Spencer said. "So, for the people who think the deal is going to close and then everything's available, that's not true. And it hasn't been true in other acquisitions that we've done. There's work for us to go do, just mechanical work for us to go do. So, it'll take us time, definitely time to get the games in the portfolio."
Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
