Microsoft Presents Fresh Proposal to UK Regulators for Activision Blizzard Acquisition

Microsoft has taken a significant step to address regulatory concerns in the UK as it strives to finalize its massive acquisition of Activision Blizzard. The companies have jointly presented a fresh proposal to the UK’s antitrust watchdog, the Competition and Markets Authority (CMA), which stands as the sole global regulator hindering the $69 billion deal. The new proposal outlines a plan to sell Activision’s cloud streaming rights outside the European Union and certain other European countries to Ubisoft Entertainment, a prominent video game developer.

In an official blog post on Tuesday, Microsoft President Brad Smith detailed the new approach, which he believes presents a substantially different transaction for the CMA’s consideration compared to the original merger agreement. Smith expressed optimism about the proposal’s potential impact on players, the advancement of the cloud game streaming sector, and the overall growth of the gaming industry.

This revamped deal follows the CMA’s prior decision to block the acquisition under its original terms, a move that diverged from the approval granted by EU regulators in May. A US federal court also confirmed in July that it wouldn’t prevent the deal’s completion. CMA CEO Sarah Cardell acknowledged the restructured proposal and confirmed the regulator’s commitment to ensuring fair competition in the cloud gaming market.

Under the new arrangement, Ubisoft, a leading French video game developer, will have the ability to license Activision’s content to any cloud gaming provider beyond the European Economic Area, including the United Kingdom. This move is anticipated to offer gamers diverse avenues to access Activision’s games, including through cloud-based multigame subscription services.

Microsoft and Activision recently agreed to extend their merger deadline to October 18, granting additional time to reach an agreement with the CMA. The same date now serves as the statutory deadline for the CMA’s decision on the revised merger proposal. Microsoft is optimistic about completing the agency’s review process ahead of the October deadline.

The planned acquisition of Activision by Microsoft was announced early last year, and its value stood at $69 billion at that time. Activision Blizzard ranks among the world’s most prominent video game developers, known for popular titles such as “Candy Crush,” “Call of Duty,” “World of Warcraft,” and “Overwatch.”