Microsoft and Activision Blizzard deal gets CMA's preliminarily approval

Friday, 22 September 2023 at 07:13

Microsoft's acquisition of Activision Blizzard has been a topic of discussion for months. In May 2023, the UK's Competition and Markets Authority (CMA) initially rejected the deal. However, the CMA official website has confirmed that the sales of Blizzard’s cloud gaming rights to Ubisoft have greatly resolved previous concerns. For this reason, the deal has now gotten an early nod according to the CMA website.

Earlier this year, the CMA blocked Microsoft's $69 billion acquisition of the entire business of Activision Blizzard. The main reason for the block is concern that the deal would harm rivalry in UK cloud gaming. After the deal was blocked, Microsoft submitted a restructuring deal for review by the CMA in August.

The new deal that Microsoft submitted states that the company will not buy the cloud gaming rights held by Activision Blizzard. The cloud gaming rights will be sold to another company, Ubisoft which has no links with Microsoft. In fact, Microsoft's proposal stated that the cloud gaming deal with Ubisoft would be complete before its deal with Blizzard.

The CMA believes the new deal makes good changes that largely address concerns raised earlier. The CMA claims that this new deal is much better than the original deal.

How will the Ubisoft deal reduce Microsoft's powers?

With the Ubisoft deal, Microsoft will not control some important content in terms of cloud gaming. Top games like Call of Duty, Overwatch and World of Warcraft will not be in Microsoft's pocket in terms of cloud gaming. According to the CMA, with this, the company will not have control over "too much".

The CMA initially found that Microsoft already had a strong position in cloud gaming services. It feared that the company could use it to stifle competition.

To address these issues, Microsoft has provided remedies. This is to ensure that the terms of Activision Blizzard's sale of rights to Ubisoft are enforceable by the CMA. The CMA has provisionally concluded that this new deal should resolve these concerns.

The CMA has now begun to meet on Microsoft's planned remedy steps. These meetings will run until October 6. Microsoft's acquisition of Activision Blizzard has been approved by regulatory agencies in various regions, including the difficult US regulatory agencies, which finally agreed to the transaction. Currently, only the British CMA remains.