The U.K.’s Competition and Markets Authority (CMA) has approved Microsoft’s proposed $69 billion takeover of gaming firm Activision Blizzard, removing the final major hurdle for the deal to close. The CMA’s approval comes after regulatory challenges in the U.S., Europe, and the U.K. over concerns that the acquisition would reduce competition, particularly in the nascent cloud gaming market. However, the CMA’s approval of the deal comes with the condition that Microsoft will not acquire cloud gaming rights, allowing for competitive prices and services for UK cloud gaming customers.
This decision marks a u-turn from the CMA, which had initially blocked the deal due to concerns about Microsoft’s dominant position in the cloud gaming market. However, Microsoft offered concessions, including divesting the cloud rights of Activision games to French game publisher Ubisoft, to address these concerns. This move will enable Ubisoft to offer Activision’s content under any business model and ensure that cloud gaming providers can use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.
While the U.K. has approved the deal, the CMA criticized Microsoft’s negotiation tactics, stating that they were not the proper way to engage with the regulatory authority. Nonetheless, Microsoft President Brad Smith expressed gratitude for the CMA’s decision, highlighting the potential benefits of the acquisition for players and the gaming industry. Activision Blizzard CEO Bobby Kotick also expressed excitement for the partnership with Microsoft and the possibilities it brings for employees and players. Throughout the scrutiny, Microsoft has tried to reassure regulators and competitors that it will not make games exclusive, entering partnerships with Nvidia and Sony.
