Microsoft’s revised offer to acquire Call of Duty developer Activision Blizzard “opens the door” to clearance, according to the UK’s competition authority.
The Competition Markets Authority (CMA) has stated that its concerns appear to have been addressed by the revised agreement.
According to the revised plans, Microsoft would not acquire Activision Blizzard’s rights to provide cloud gaming services.
UK authorities halted the initial $69 billion (£59 billion) agreement.
Due to worries that the merger would hurt competition in the UK cloud gaming market, the CMA blocked Microsoft’s acquisition of Activision earlier this year.
The following month, Microsoft resubmitted the agreement with the revised terms for review by the antitrust regulator.
As part of the new deal, the French video game publisher Ubisoft will have exclusive rights to stream Activision titles from the cloud for 15 years, previously held by Microsoft.
Since Activision sold this division to Ubisoft, Microsoft will no longer have a hand in the cloud streaming of games like Call of Duty, Overwatch, and World of Warcraft.
As CMA CEO Sarah Cardell put it in a statement released on Friday, “The CMA’s position has been consistent throughout – this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved.”
Before a final decision is made on the deal, a discussion will be started.
Confronting Agreement
Executives at Microsoft and Activision who have worked tirelessly and put their names on the line to get this agreement done will undoubtedly breathe a sigh of relief with this latest development.
The announcement that Microsoft will acquire Activision Blizzard, the largest buyout in the gaming business, was made all the way back in January of last year.
However, it has been met with opposition and a varied reaction from authorities all around the world.
European Union regulators approved the merger in May, and a subsequent appeals court ruling rejected a request to halt the takeover by the US competition authority.
The takeover appeared doomed earlier this year, so the fact that it is now on the approach of approval is no small feat.
The CMA’s Ms. Cardell said, “it would have been far better… if Microsoft had put forward this restructure during our original investigation,” in its most recent statement.
As the court stated, “This case illustrates the costs, uncertainty, and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”
The Deal That Is Microsoft: An Overview
Concerned that Microsoft would restrict access to key titles for the PlayStation, Sony also initially opposed the merger.
The CMA has stated that with these new safeguards in place, gamers will have even more options for playing Activision’s games, including using cloud-based multigame subscription services.
Additionally, it stated that while it still had “limited residual concerns,” the new agreement “keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft,” as opposed to Microsoft.
Ms. Cardell explained that this was “not a tweak,” but rather a “fundamentally restructured deal” on the BBC’s Today show.
The settlement closes the CMA’s first “test case” and provides insight into the potential operation of UK competition rules following Brexit.
Microsoft is still anticipating that the acquisition will lead to increased demand for the Xbox system and the company’s gaming subscription services.
Vice Chairman and CEO Brad Smith remarked that the company was “encouraged” by the development.
As the company puts it, “we presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the 18 October deadline.”
After the consultation period ends on October 6th, Microsoft expects the CMA to make a final decision on the updated bid within the following month. Its consent is necessary for the deal to proceed on a global scale.
According to Activision, this “great news” for its partnership with Microsoft is just the beginning.
Furthermore, “we look forward to working with Microsoft toward completing the regulatory review process,” the company said.
It could be some time before the players really grasp the significance of this. However, Microsoft’s business strategists and game developers are wondering what they can do now that the corporation controls so much of the gaming industry.
One expert told the BBC that Microsoft is now in a “unique position” because of the deal, even though no major announcements regarding future games or improvements have been made as of yet.
According to Gareth Sutcliffe, senior games analyst at Enders Analysis, Microsoft will gain access to Activision’s mobile-focused studio.
In the end, it’s about being able to cover any and all games with a single membership. Mobile, console, and PC platforms are now all within Microsoft’s reach.
In addition, he said, “it’s all about the transfer of knowledge [from Activision’s team],” with Microsoft hoping Activision can build on the success of games like Candy Crush.
An unredacted document leaked during Microsoft’s fight with US authorities a few days prior to the announcement seemed to indicate the corporation planned to introduce updated versions of its Xbox Series S and Series X systems in 2024.
One slide from a presentation that was leaked showed vague intentions for a new generation of console in the year 2028.
There was also an old memo included that hinted Microsoft had considered buying Nintendo before making their bid for Activision, which seems unlikely.
