Microsoft’s Epic Victory: $68.7 Billion Activision Blizzard Acquisition Approved by UK Authorities
In a stunning turn of events, Microsoft has finally emerged victorious in its near-two-year battle to acquire gaming giant Activision Blizzard. After a fierce antitrust tussle, the UK’s Competition and Markets Authority (CMA) has accepted a restructured proposal that addresses concerns over Microsoft’s potential dominance in the cloud gaming market.
The key element of Microsoft’s concession lies in Activision’s cloud-streaming rights, which will not be sold to Microsoft but instead go to Ubisoft, the French video game publisher. Ubisoft will now hold the cloud-streaming rights for all PC and console games for the next 15 years, excluding the European Economic Area (EEA). Within the EEA, Ubisoft will receive a non-exclusive license to sell and distribute cloud-streaming versions of Activision’s games. This move ensures that Microsoft does not have an iron grip on this rapidly developing market.
CMA chief executive Sarah Cardell expressed her satisfaction with the outcome, emphasizing the positive impact it will have on consumers. “With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important market,” she said. “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 first unveiled its plans to acquire Activision Blizzard in January 2022, in a record-breaking $68.7 billion deal. This acquisition would solidify Microsoft as the third-largest gaming company globally by revenue, granting them control over iconic franchises like World of Warcraft and Call of Duty.
While the European Commission and the US Federal Trade Commission eventually greenlit the deal with certain conditions, the UK has remained steadfast in its opposition. The CMA deemed the deal would substantially weaken competition in the cloud gaming market and expressed concerns about Microsoft’s existing market advantage. They argued that Windows’ widespread usage and Microsoft’s significant cloud infrastructure business gave the tech giant an unfair advantage.
Throughout the lengthy regulatory proceedings, Microsoft made various agreements to keep Activision games on rival platforms, including Nintendo, Sony, and Steam, for a 10-year period. However, the CMA remained unconvinced that these proposals could adequately replace the competitive dynamism in the market.
In a bid to overcome the regulatory hurdles, Microsoft offered concessions in August, proposing to divest the cloud streaming rights for all current and future Activision games to Ubisoft. The UK signaled their approval last month, stating that the proposal substantially addressed their concerns. Now, with the CMA fully endorsing the deal, Microsoft has achieved a significant victory.
While the UK celebrates its ability to secure these changes, it also criticizes Microsoft’s tactics throughout the acquisition process. Cardell admonished Microsoft for their unwillingness to restructure earlier and described their approach as a waste of time and money.
With the acquisition finally concluded, Microsoft’s gaming empire expands further, setting the stage for a new era in the gaming industry.
