CMA gives final approval for Microsoft’s Activision Blizzard acquisition

The path is cleared

The Competition and Market Authority (CMA) in the United Kingdom has given its final approval to Microsoft’s proposed acquisition of Activision Blizzard.

Like the provisional CMA approval in September 2023 outlined, Microsoft will divest the cloud streaming rights to Activision Blizzard’s game catalog outside of the European market, which will be purchased by Ubisoft for a period of 15 years.

In this context, Microsoft will need to provide support to Ubisoft for porting games to operating systems other than Windows and enable the use of emulators like Proton, on Ubisoft’s request. Ubisoft will also get a heads-up on future Activision Blizzard development plans. Activision Blizzard games will need to be available for Ubisoft’s cloud streaming service – and Ubisoft is free to create this service with whichever business model it wants – on the same day as in the regular way. A trustee will have oversight of the implementation of these conditions.

The path is clear: Microsoft is now free to complete the merger / Microsoft

“With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market,” the CMA’s chief executive, Sarah Cardell, said in a statement. “As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome.”

Microsoft VP Brad Smith stated: “We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.”

We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.

— Brad Smith (@BradSmi) October 13, 2023

The CMA initially refused to give approval to the transaction, citing Microsoft’s dominance of the cloud gaming market as the prime argument against the deal. After the European Union waved the deal through and the Federal Trade Commission (FTC) in the United States suffered a loss at court against Microsoft, however, the CMA looked at the acquisition anew – an unprecedented second chance.

Cardell had a stern warning for other companies that may eye following Microsoft in this regard: “Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.”

The CMA will have the necessary legal instruments at its disposal to enforce the cloud streaming rights divestment, in case Microsoft tries anything funny. This, of course, looks unlikely after such a hard-fought victory.

Microsoft reportedly eyed closing the deal this Friday, for which the path is now indeed clear.

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