Written by Kelvin Chan | The Associated Press
The British Competition and Markets Authority has given preliminary approval to Microsoft’s revised $69 billion acquisition of Activision Blizzard, a major video game company based in Santa Monica. This approval is a significant step towards finalizing one of the largest tech deals in history.
The competition watchdog stated that the updated proposal adequately addresses previous concerns about potential anti-competitive practices in the rapidly growing cloud gaming market. Cloud gaming enables players to stream games to various devices without the need for expensive consoles or gaming computers.
Related: How the Microsoft-Activision deal was revived
The revised offer has opened the door for the deal to be cleared, according to the watchdog. Microsoft has taken steps to resolve the remaining concerns, and the regulators are currently seeking feedback from interested parties before making a final decision.
The announcement indicates that the U.K. watchdog is likely to reverse its previous decision to block Microsoft’s acquisition of Activision Blizzard, which is known for popular gaming franchises like Call of Duty and World of Warcraft.
“Throughout, the CMA’s stance has remained consistent – this merger can only proceed if competition, innovation, and choice in cloud gaming are preserved,” said CEO Sarah Cardell. “In response to our initial prohibition, Microsoft has substantially restructured the deal, demonstrating its commitment to addressing our concerns.”
Also see: FTC planning legal action to halt Microsoft’s Activision deal
Since the announcement of the deal in January 2022, Microsoft has obtained approvals from over 40 antitrust authorities around the world. Notably, the company received approval from the European Union after agreeing to allow users and cloud gaming platforms to stream its games without paying royalties for a decade.
However, regulatory obstacles arose in the U.S. and the U.K., with concerns that the acquisition could harm competition and negatively impact gamers, particularly those using Sony’s PlayStation instead of Microsoft’s Xbox.
The U.S. Federal Trade Commission opposed the transaction but lost a court battle to block it, thereby clearing the way for the deal to proceed. The FTC’s appeal of that decision is still ongoing.
In an effort to address the objections raised by the British regulator, the companies agreed to extend the original deadline to close the deal until mid-October. The Competition and Markets Authority then suspended its original decision and initiated a new investigation into the revised proposal.
Microsoft President Brad Smith expressed optimism about the U.K. regulator’s positive development in the review process.
“We have presented solutions that we believe fully address the CMA’s remaining concerns regarding cloud game streaming, and we will continue our efforts to obtain approval and close the deal before the October 18 deadline,” he said.
Activision CEO Bobby Kotick posted a message online, stating that the preliminary approval is a significant milestone for the merger and reflects their collaborative work with regulators to find solutions.
In the restructured deal, Microsoft will transfer cloud streaming rights for all current and future Activision games released over the next 15 years outside of the European Union and three other European countries to French game studio Ubisoft Entertainment.
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