Microsoft-Activision Deal: a Step Closer to Completion

Introduction

Microsoft is one step closer to overcoming the final hurdle in its quest to acquire Activision Blizzard. The $75bn deal that would see Microsoft taking over the game developer, best known for developing Call of Duty, is set to be approved by the UK competition regulator, the Competition and Markets Authority (CMA).

CMA’s Previous Decision

Back in April, the CMA blocked the deal presented at the time. After launching an in-depth investigation into what is considered the biggest tech takeover in history, the UK watchdog established that the deal would weaken global competition between Microsoft’s Xbox and Sony’s PlayStation consoles.

It was highlighted that it would have been financially beneficial for Microsoft to make Activision’s games, including the highly popular Call of Duty, exclusive to its consoles. Consequently, it was established that the takeover could threaten competition, resulting in higher prices and less choice for UK gamers. However, the CMA did not rule out changing its decision if Microsoft met certain requirements. The newest developments seem to address this.

What Changed?

The CMA is now set to approve the tech takeover - what has changed?

Since the CMA’s previous decision, Microsoft submitted a revised proposal which included selling Activision’s cloud streaming rights to French rival, Ubisoft. The watchdog’s response to the new proposal appears much more positive, stating that it ‘substantially addresses previous concerns’.

Nonetheless; despite Microsoft’s assurances, the CMA has now raised some concerns regarding the enforceability of the terms on the sale of the rights.

What’s next?

The CMA, which originally blocked the merger in April, was seen as the last big hurdle to overcome, before the deal could go ahead. Several other watchdogs, including the EU Commission, have already cleared the transaction. This came after Microsoft’s commitment to license Activision’s catalogue to other companies, including the Call of Duty franchise.

The CMA is now running a consultation into Microsoft’s proposed remedies to enforce the sale of rights terms, which should last until the 6th of October. Latest reports indicate that Microsoft is preparing to finalise the deal on 13th October 2023.  

By Scott Hickman