Microsoft's revised $69 billion acquisition of video game developer Activision Blizzard has received preliminary permission from the British Competition and Markets Authority (CMA), a major development in one of the biggest tech deals in history.
The CMA decision comes after months of consideration and initial worries about the deal's possible effects on competition in the quickly growing cloud gaming business, where gamers may access games via streaming to various devices, obviating the need for pricey gaming consoles and computers.
What Did The CMA Say?
The amended proposal "substantially addresses prior concerns," according to the CMA's release, and may "open the door to the deal being cleared." Before concluding, the regulator is presently gathering input from interested parties. Microsoft has provided solutions to address any unresolved issues.
"In particular, the sale of Activision's cloud streaming rights to Ubisoft will prevent this important content - including games such as Call of Duty, Overwatch, and World of Warcraft - from coming under the control of Microsoft in relation to cloud gaming," the regulator noted, according to Engadget.
Sarah Cardell, CEO of the CMA, underlined the value of maintaining competition, innovation, and choice in the cloud gaming industry. She noted that the CMA has maintained its position that the Microsoft-Activision merger could only proceed if competition, innovation, and choice in cloud gaming were safeguarded.
"In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns," she said, as quoted by ABC News.
Microsoft has received permits from antitrust regulators in more than 40 nations since the deal's announcement in January 2022, including the European Union, where Microsoft agreed to let customers and cloud gaming platforms stream its titles without paying royalties for a decade.
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Regulatory issues, however, arose in the US and the UK due to worries that the acquisition might hurt competition and hurt gamers, particularly those using Sony's PlayStation systems.
The Federal Trade Commission (FTC) in the US initially opposed the deal, but its attempts to do so were unsuccessful due to legal issues. The FTC is still appealing that judgment.
Microsoft, Activision Express Optimism
Microsoft and Activision delayed the original July deadline for the merger to close in mid-October to resolve concerns from British regulators. The altered proposal was then the subject of a second inquiry by the CMA.
According to Microsoft President Brad Smith, they have presented solutions that will "fully address the CMA's remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close before the October 18 deadline." Smith was upbeat about the UK watchdog's favorable review process.
Activision CEO Bobby Kotick hailed the preliminary approval as a "significant milestone" and evidence of their cooperation with authorities.
According to TechRadar, Kotick stated in an email to employees regarding the Microsoft-Activision merger, "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."
The reworked arrangement requires Microsoft to sell cloud streaming rights for all Activision games released over the next 15 years to Ubisoft Entertainment outside the EU and three other European nations.
The CMA's consultation on Microsoft's suggested remedies is scheduled to end on October 6, signaling that a decision on whether to approve the transaction will be made at that point.
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