UK Regulators Clear Microsoft’s $69 Billion Activision Blizzard Acquisition
Microsoft’s monumental $69 billion acquisition of video game giant Activision Blizzard has received final approval from the UK’s antitrust watchdog. The Competition and Markets Authority (CMA) announced its decision on Friday. This approval marks a major victory for Microsoft. It paves the way for the largest deal in the history of the video game industry. The merger had faced significant regulatory hurdles globally.
Initial Concerns and Blockage
The CMA had previously blocked the deal in April 2023. Their primary concern focused on the emerging cloud gaming market. Regulators feared Microsoft could gain too much power in this sector. Microsoft owns the Xbox console and a growing cloud gaming service. Owning Activision’s popular games, such as Call of Duty, could harm competition. This would limit consumer choice and innovation, according to the CMA.
Microsoft’s Key Concession
To address these concerns, Microsoft proposed a significant change. It offered to sell the cloud streaming rights for all current and future Activision Blizzard games to Ubisoft Entertainment SA. This agreement covers a 15-year period. Ubisoft, a French video game developer, will manage these rights outside of the European Economic Area. This includes key markets like the United States. Microsoft will not control the licensing of Activision titles for cloud gaming. This move directly aimed to soothe the CMA’s worries about market dominance. It also ensures fair access for other cloud gaming providers.
Global Regulatory Landscape
The UK’s approval comes after a complex global regulatory journey. Many other major international bodies had already cleared the acquisition. These include the European Union, China, Japan, and Brazil. Meanwhile, the U.S. Federal Trade Commission (FTC) also tried to block the deal. However, their efforts failed in a U.S. federal court. The FTC argued the merger would harm competition in the console gaming market. It also raised concerns about subscription services. Despite this, the U.S. courts did not agree with the FTC’s arguments. This left the UK as the final major hurdle for Microsoft.
Impact on the Gaming Industry
The acquisition allows Microsoft to integrate Activision’s vast portfolio. This includes blockbuster franchises like Call of Duty, World of Warcraft, and Candy Crush. Microsoft aims to strengthen its Xbox ecosystem. It also seeks to expand its Game Pass subscription service. For consumers, this could mean more Activision games available on Xbox Game Pass. Microsoft has also committed to making Call of Duty available on competing platforms. These include PlayStation and Nintendo for the next 10 years. This decision will reshape the competitive landscape of the video game industry for years to come.
What’s Next for Microsoft and Activision
The CMA stated that the redesigned deal will prevent Microsoft from locking up cloud gaming competition. The regulator believes it will promote fair pricing and better services. This landmark approval means the deal is now expected to close very soon. Microsoft and Activision Blizzard can finally move forward. They can now combine their operations and focus on future game development and distribution strategies.
