Summary
- The UK's CMA has given preliminary approval to Microsoft's revised Activision Blizzard deal, addressing concerns about unfair advantage in cloud gaming.
- The amendment divests Microsoft of cloud streaming rights, transferring them to Ubisoft for the next 15 years.
- CMA's approval is not final, as investigations into the deal and cloud gaming remain open until October 6. A court case with the FTC and an extended acquisition deadline adds uncertainty to the deal.
The UK’s Competition and Markets Authority, or CMA, has made a preliminary decision approving Microsoft’s new version of the Activision Blizzard deal. It was expected that the CMA would make a preliminary ruling on the ABK acquisition sometime this week, with a more definitive response coming by October 18.
The CMA initially blocked the Activision Blizzard acquisition in April, marking the second major government authority to openly oppose the deal. The United States’ FTC has also been vocally against the pending agreement since it was first announced in January 2022. The CMA stated that its concerns centered primarily on the impact the acquisition would have on cloud gaming, claiming that Microsoft would end up with an unfair advantage in the budding market.
In an attempt to assuage these concerns, Microsoft amended the Activision Blizzard deal, this time divesting the tech giant of any cloud streaming rights of ABK games. Those rights would instead be transferred to Ubisoft, which would be able to bring PC and console Activision Blizzard games to the Ubisoft+ streaming service over the next 15 years and oversee licensing to other cloud gaming platforms. This amendment seems to have satisfied the CMA, which has given preliminary approval of the new version of the deal.
“The CMA’s preliminary approval is great news for our future with Microsoft,” Activision Blizzard said in a statement to The Best War Games. “We’re pleased the CMA has responded positively to the solutions Microsoft has proposed, and we look forward to working with Microsoft toward completing the regulatory review process.”
For its part, the CMA confirmed that the new Activision Blizzard agreement with Microsoft “substantially addresses previous concerns and opens the door to the deal being cleared.” The fact that Ubisoft is an entirely independent third party and Microsoft will now be entirely hands off when it comes to cloud streaming of ABK games seems to have been paramount in the deal being approved. It satisfies the CMA’s desire to ensure that the cloud gaming market remains balanced and encourages competition in a space that is still in its infancy.
Of course, this is not the CMA’s final decision. The government agency is also separately deciding whether Microsoft should be allowed to purchase Activision at all. That investigation, along with the probe into cloud gaming, will remain open until October 6. In the meantime, a court case is taking place in the US with the FTC, which recently resulted in a major leak of Microsoft’s long-term plans for Xbox. Given these hiccups, Microsoft and Activision Blizzard agreed to extend the acquisition deadline from July 18 to October 18, 2023. If the acquisition still isn’t finalized by then, it’s uncertain if the two conglomerates will still pursue closing the deal or call it quits.