UK Regulators Signal Approval for Microsoft's Revised Bid to Acquire Activision Blizzard

Microsoft’s revised offer to acquire Activision Blizzard has received preliminary approval from the UK’s Competition and Markets Authority (CMA), signaling a positive development in the merger’s progress. The CMA had initially blocked Microsoft’s $69 billion deal over concerns of potential harm to competition in cloud gaming in the UK.

Under the updated proposal, Microsoft has agreed not to purchase the cloud gaming rights owned by Activision Blizzard. Instead, Microsoft will transfer the rights to stream Activision games from the cloud to the French video games publisher Ubisoft for a period of 15 years. This move ensures that cloud streaming of popular games like Call of Duty, Overwatch, and World of Warcraft will remain outside of Microsoft’s control.

The CMA’s chief executive, Sarah Cardell, emphasized that their stance throughout the merger review process has been consistent: the deal could only proceed if it preserved competition, innovation, and choice in the cloud gaming industry.

This development is a significant milestone for Microsoft and Activision, as the deal was the largest takeover in the history of the gaming industry. While it faced controversy and mixed responses from regulators worldwide, it was approved by the European Union in May, and the US competition watchdog’s attempt to pause the purchase was rejected by an appeals court.

Sony had also initially objected to the deal, fearing that Microsoft might restrict access to major games on its PlayStation platform. The CMA stated that the additional protections put in place in the revised deal would ensure gamers could access Activision’s games through various channels, including cloud-based multi-game subscription services.

Despite the CMA’s preliminary approval, the deal is not finalized yet. A consultation will be opened before a final decision is made. Microsoft hopes to receive approval and close the deal before the October 18th deadline, as without the CMA’s approval, the deal cannot proceed globally.

This merger will have a significant impact on the gaming industry, as Microsoft gains control of major gaming franchises. While specific plans and announcements are yet to be made, this acquisition places Microsoft in a unique position to cover various gaming platforms, including mobile, consoles, and PC, and leverage the expertise of Activision’s studios to expand its gaming offerings.

Additionally, an unredacted document that surfaced during Microsoft’s legal battle with US regulators hinted at plans for refreshed versions of its Xbox Series S and Series X consoles in 2024, with a next-generation console planned for 2028. The document also mentioned an old memo suggesting that Microsoft had considered the possibility of purchasing Nintendo, although this idea predates the bid for Activision.