Microsoft’s $69bn (€64bn) acquisition of Activision Blizzard has been given a new chance of approval from British regulators. The Competition and Markets Authority (CMA) has announced that it will open a new investigation into the deal after Microsoft made significant changes to address concerns over its dominance in the cloud gaming market. As part of the revised deal, Ubisoft Entertainment will be granted rights to distribute Activision games. The CMA has set a deadline of October 18 for the initial phase of the probe.
This latest development follows a series of twists and turns in the global regulatory battles surrounding the proposed takeover. Initially, the deal appeared to be on the verge of collapse due to concerns raised by several competition watchdogs. However, it gained unexpected momentum when Britain agreed to review new evidence. In the United States, Microsoft successfully defended against a court challenge from the Federal Trade Commission. The European Union also cleared the deal in May, albeit with certain behavioral remedies.
The news of the CMA’s reversal has had a positive impact on the stock market, with shares in French game maker Ubisoft, which owns the popular Assassin’s Creed franchise, surging by over 8% during Paris trade. Sarah Cardell, the CEO of the CMA, expressed her previous concerns about Microsoft’s potential control over the development of the cloud gaming market. However, she stated that the new deal could alleviate these concerns, as control over the cloud streaming rights would shift to an independent company. The CMA will carefully review the details of the new deal to ensure its effectiveness.
In July, Microsoft formally requested the British regulator to reconsider its previous veto of the deal, citing significant changes in circumstances. These changes included the US court’s decision in favor of Microsoft and a subsequent licensing agreement with rival Sony for the popular Activision blockbuster title, Call of Duty. Microsoft emphasized that under the restructured transaction, it would not have the exclusive rights to release Activision Blizzard games on its own cloud streaming service, Xbox Cloud Gaming, nor would it have exclusive control over the licensing terms for rival services. As part of the revised deal, Ubisoft will be granted the rights to distribute Activision games.
Overall, this new development has breathed new life into Microsoft’s acquisition of Activision Blizzard. With the CMA opening a new investigation and the revised deal addressing concerns over market dominance, the tech giant may be one step closer to securing approval from British regulators. The outcome of the probe will be closely watched by industry experts and investors alike.
Source: Bloomberg
