Microsoft’s Activision Blizzard Acquisition Nears Approval in the UK After Proposed Amendments

Microsoft’s multibillion-dollar acquisition of Activision Blizzard has moved a step closer to approval in the UK as regulators signal that an amended version of the deal could resolve their concerns.

The UK Competition and Markets Authority (CMA) issued a statement stating that Microsoft’s proposed changes, which involve the sale of Activision’s cloud gaming rights to Ubisoft, a competitor, have the potential to address their concerns and maintain competition in the emerging cloud gaming industry.

Microsoft announced the acquisition in early 2022, but it faced opposition from the UK competition regulator in April over fears that Microsoft’s control of popular Activision titles like “Call of Duty” and “World of Warcraft” could lead to withholding content from rival gaming platforms, especially newer cloud-based services that offer game content streaming over the internet.

Under Microsoft’s amended proposal, Ubisoft would gain the ability to offer access to Activision titles through cloud streaming services, in addition to traditional retail channels.

The CMA believes this amended deal replicates the role that Activision would have played in the market as an independent entity.

If approved, the acquisition would position Microsoft as the third-largest video game publisher globally, following Tencent and Sony.

Microsoft expressed encouragement regarding the positive development in the CMA’s review process. The company’s President, Brad Smith, stated that they believe their solutions address the CMA’s remaining concerns related to cloud game streaming.

Activision, known for games like “Overwatch” and “Candy Crush,” welcomed the preliminary approval, and its shares gained 1.8% in early trading.

The European Union approved the deal in May after accepting Microsoft’s commitments to license Activision’s games to other platforms, a decision the UK had initially rejected.

While the US Federal Trade Commission opposes the acquisition, a federal judge ruled in July that the deal can proceed, with the FTC appealing the decision.

Analysts suggest that while Microsoft’s concession of cloud gaming rights may not be ideal, it appears to be the final hurdle in the approval process.

The CMA has noted some “residual concerns” regarding the Ubisoft deal but is now consulting on the remedies proposed by Microsoft before making a final decision.