Microsoft’s $68.7 billion deal to acquire Activision Blizzard has been approved by UK regulators. The UK Competition and Markets Authority (CMA) concluded that the deal can continue after Microsoft recently restructured the deal to transfer cloud gaming rights for current and new games from Activision Blizzard to Ubisoft. The decision paves the way for the deal to close now that the UK regulator has given the green light.
“The CMA has decided to grant Microsoft Corporation (Microsoft) its consent to acquire Activision Blizzard, Inc. (Activision) (the Parties), excluding Activision’s cloud streaming rights outside the European Economic Area (EEA) (the Merger ), subject to the condition that the sale of Activision’s cloud streaming rights is completed before the merger is completed.” reads a statement from the CMA.
The CMA describes Microsoft’s award as a “game-changer that will promote competition” in the growing cloud gaming market. “By selling Activision’s cloud streaming rights to Ubisoft, we have ensured that Microsoft cannot have a stranglehold on this important, rapidly developing market,” says Sarah Cardell, CEO of CMA. “As cloud gaming grows, this intervention will ensure that people get more competitive prices, better services and more options. “We are the only competition agency worldwide that has achieved this result.”
Microsoft vice president and president Brad Smith says the company welcomes the CMA’s decision. “We have cleared the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide,” Smith says in a message on X (formerly Twitter). We are now waiting for news from Microsoft about the completion of the acquisition.
The decision comes months after the Competition and Markets Authority initially moved to block Microsoft’s deal in April over concerns about cloud gaming. Microsoft appealed that decision to the UK Competition Appeal Tribunal (CAT), but both sides suspended that process in July to make way for Microsoft’s restructured deal that was designed to address the concerns. After successful talks with the CMA, Microsoft and Activision Blizzard have agreed to extend the deadline of their merger agreement until October 18.
The Xbox maker originally announced the deal in January 2022 and has since faced close scrutiny from regulators, including a FTC v. Microsoft case that revealed many Xbox secrets. The Federal Trade Commission is still appealing its failure to obtain a preliminary injunction to block the Microsoft deal, and the Ninth Circuit Court of Appeals’ decision will be issued in December.
Because the FTC does not have a preliminary injunction in place, Microsoft can now close its proposed acquisition of Activision Blizzard before the deal deadline. The closure will end a 20-month process of approvals and regulatory battles, and comes months after EU regulators approved the deal thanks to additional concessions from Microsoft.
Microsoft’s obligations to the European Commission will allow consumers in EU countries to stream through “any cloud game streaming service of their choice” all current and future Activision Blizzard games for PC and consoles for those who have a license.
Microsoft has made several cloud gaming deals to license Activision Blizzard content, and the company’s restructured deal means it will not control Activision Blizzard’s cloud gaming rights outside of EU markets. Ubisoft will acquire these rights for a period of 15 years, allowing the publisher to license titles to Microsoft for inclusion in Xbox Cloud Gaming.