The UK Competition and Markets Authority (CMA) has provisionally approved Microsoft’s takeover of Activision Blizzard.
The CMA blocked Microsoft’s initial proposal, prompting the tech giant to submit a restructured deal to address the regulator’s cloud gaming concerns.
These remedies included transferring Activision Blizzard’s cloud gaming rights to French publisher Ubisoft for the next 15 years, preventing Microsoft from publishing Activision Blizzard titles exclusively on its own cloud streaming platforms.
Microsoft said the move would allow it to submit a “significantly different transaction” to the CMA than the original proposal it submitted in 2022.
The CMA seems to agree with this, with the regulator suggesting that Ubisoft will now take on the role that Activision would have taken in the cloud market as an independent player, going some way to addressing its initial concerns.
“Contrary to the original agreement, Microsoft will no longer control the cloud gaming rights to Activision’s content and therefore would not be able to restrict access to or from Activision’s core content to its own cloud gaming service “To withhold games from competitors,” he wrote the CMA in a press release.
“Unlike the remedies previously rejected by the CMA, Ubisoft is free to offer Activision’s games both directly to consumers and to any cloud gaming service provider, however it chooses, including buy-to-play or multigame subscription services or a new delivery model.” Content that may emerge as the market evolves.
“The deal with Ubisoft also requires Microsoft to port Activision games to operating systems other than Windows and to support game emulators upon request, addressing the other key deficiency of the previous remedial package.”
Microsoft’s cloud gaming deal with Ubisoft appears to be convincing the British regulator
The CMA has identified some “limited remaining concerns” about the new deal, but it appears Microsoft’s new look proposal is a more palatable proposal.
CMA CEO Sarah Cardell welcomed the restructured deal but said the entire process would have gone more smoothly if Microsoft had been more flexible during the regulator’s initial investigation.
“The CMA’s position remained consistent throughout – this merger could only happen if competition, innovation and choice in cloud gaming were maintained. In response to our original ban, Microsoft has now fundamentally restructured the deal and taken the necessary steps to address our original concerns,” Cardell said.
“However, it would have been far better if Microsoft had proposed this restructuring during our original investigation. This case illustrates the cost, uncertainty and delay that can occur to parties when a credible and effective remedy exists but is not put on the table at the right time.”
An Activision Blizzard spokesperson commented on the news, telling Game Devleloper that the CMA’s preliminary approval is “great news for our future with Microsoft.”
“We are pleased that the CMA has responded positively to Microsoft’s proposed solutions and we look forward to working with Microsoft to complete the regulatory review process,” they added.
The CMA has now opened a consultation on Microsoft’s proposed remedies, which runs until October 6, 2023.
Microsoft hopes to complete its merger with Activision Blizzard by October 18 and recently overcame a legal challenge from the FTC in the United States, paving the way for the acquisition to be completed on home soil.