British competition regulators have given preliminary approval to Microsoft’s restructured $69 billion deal to acquire video game maker Activision Blizzard. This approval is a significant step forward for one of the largest tech transactions in history. The Competition and Markets Authority has stated that the updated proposal addresses previous concerns about stifling competition in the fast-growing cloud gaming market.
Cloud gaming allows players to stream games to various devices without the need for expensive consoles or gaming computers. Microsoft’s offer includes remedies to resolve lingering concerns, and regulators are currently gathering feedback before making a final decision. This announcement indicates that the UK watchdog is close to reversing its initial decision to block the Microsoft-Activision merger.
Since the deal was announced in January 2022, Microsoft has obtained approvals from antitrust authorities in over 40 countries, including the European Union. To gain EU approval, Microsoft agreed to allow users and cloud gaming platforms to stream its titles without paying royalties for a decade. However, the deal faced opposition in the US and the UK due to concerns about competition and potential harm to gamers, particularly those who use Sony’s PlayStation console.
The Federal Trade Commission initially opposed the transaction but lost in court, allowing the deal to proceed. The FTC’s appeal is still ongoing. In an effort to address the UK regulator’s concerns, the companies extended the original deadline to mid-October. The CMA then launched a new investigation into the revised proposal.
Microsoft President Brad Smith is pleased with the positive development in the UK watchdog’s review process and is optimistic about earning approval before the October 18 deadline. Activision CEO Bobby Kotick sees the preliminary approval as a significant milestone for the merger and praises the collaborative work with regulators.
As part of the restructured deal, Microsoft will sell cloud streaming rights for all current and future Activision games released over the next 15 years outside of the EU and three other European countries to French game studio Ubisoft Entertainment.
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