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UK Regulatory Body Approves Microsoft’s Acquisition of Activision Blizzard, Clearing the Final Barrier for the Landmark Deal

by Chloe Baker
8 comments
Gaming Industry Acquisition

Microsoft’s proposed acquisition of video game developer Activision Blizzard received final clearance from the United Kingdom’s Competition and Markets Authority (CMA) this past Friday. This reverses the CMA’s prior inclination to obstruct the $69 billion transaction and eliminates the last significant hurdle to what stands as one of the largest technology deals ever recorded.

The approval from the CMA had been anticipated since the regulatory body provisionally green-lighted a modified proposal from Microsoft in the previous month. The revised proposal was designed to allay fears that the merger would reduce market competition and negatively affect the gaming community.

This definitive authorization paves the way for Microsoft, the producer of the Xbox gaming console, to finalize its purchase of Activision Blizzard, the company responsible for the widely successful Call of Duty franchise.

Originally, the companies had planned to finalize the deal by mid-July but decided to extend the deadline to October 18 to allow time to address the CMA’s reservations. The CMA’s nod of approval also spares Microsoft from having to pay a $4.5 billion penalty to Activision Blizzard, a stipulation if the deal failed to materialize.

Additional Context

  • The Internal Revenue Service claims that Microsoft might owe roughly $29 billion in back taxes, a claim that Microsoft disputes.
  • Concerns about the growing dominance of Amazon and Microsoft in the cloud computing sector have prompted a separate investigation in the UK.
  • Sony is working on an Access controller for the PlayStation designed to facilitate gaming for individuals with disabilities.

The CMA stated that the revised deal would prevent Microsoft from monopolizing the burgeoning cloud gaming market, thereby preserving competitive pricing and service options for UK cloud gaming consumers. Microsoft President Brad Smith expressed gratitude for the CMA’s “exhaustive review and conclusion,” stating, “We have now navigated past the final regulatory hurdle, and we believe this acquisition will serve to the advantage of players and the global gaming industry.”

Activision CEO Bobby Kotick echoed this sentiment, declaring, “We are eager to join the Xbox Team.”

Since the announcement of the deal in January 2022, Microsoft has successfully obtained approval from antitrust authorities in over 40 countries, including a crucial endorsement from the 27-member European Union. As part of the agreement with the EU, Microsoft pledged to permit users and cloud gaming platforms to stream its titles without royalty payments for a decade.

However, the deal had encountered opposition from regulatory agencies in both the United Kingdom and the United States, due to concerns it could potentially quash competition within the video gaming sector. Notably, Sony expressed apprehension that the deal would restrict access for PlayStation users to the Call of Duty series.

The U.S. Federal Trade Commission unsuccessfully sought legal measures to temporarily halt the deal for further review. While it has appealed this decision, the CMA’s approval was the last significant regulatory impediment to the acquisition. Under the newly structured agreement, Microsoft will divest cloud streaming rights for all current and upcoming Activision games for the next 15 years to French gaming company Ubisoft Entertainment, outside of the EU and three other European nations.

Initially, the UK regulators had moved to block the deal in April, citing fears that Microsoft could monopolize titles from Activision in the emergent cloud gaming sector, which enables players to stream games on tablets and smartphones without the need for expensive gaming consoles. Yet, the CMA subsequently postponed its final judgment, citing the need for further evaluation and agreeing to suspend appeal proceedings in collaboration with Microsoft.

A contributing factor to this delay was the European Union’s approval, which was secured after Microsoft committed to licensing Activision games to cloud gaming platforms on a royalty-free basis. Another pivotal development was Microsoft’s agreement with Sony to ensure the availability of the Call of Duty franchise on the PlayStation platform for at least the next 10 years.


AP Technology Writer Matt O’Brien provided additional reporting from Providence, Rhode Island.

Frequently Asked Questions (FAQs) about Microsoft’s Acquisition of Activision Blizzard Approved by UK Regulators

What regulatory body gave Microsoft’s acquisition of Activision Blizzard final approval?

The United Kingdom’s Competition and Markets Authority (CMA) gave final approval to Microsoft’s proposed $69 billion acquisition of Activision Blizzard.

When was the final approval for the acquisition granted?

The final approval was granted on a past Friday, although the specific date has not been disclosed in the original text.

Was the CMA’s decision to approve expected?

Yes, the CMA’s decision was anticipated, as the body had given preliminary approval to a revised proposal from Microsoft in the preceding month.

What was the initial deadline for the deal to close?

The original deadline for the deal to close was mid-July. However, this was extended to October 18 to address the CMA’s initial reservations.

What would have been the financial penalty for Microsoft if the deal had not closed?

If the deal had not closed, Microsoft would have been obligated to pay a penalty of $4.5 billion to Activision Blizzard.

How does the deal impact the cloud gaming market in the UK?

The CMA stated that the revised deal would prevent Microsoft from monopolizing the burgeoning cloud gaming market, thereby preserving competitive pricing and service options for UK consumers.

How many countries’ antitrust authorities have approved the acquisition?

Since the announcement of the deal in January 2022, Microsoft has successfully obtained approval from antitrust authorities in over 40 countries, including a crucial endorsement from the 27-member European Union.

Were there any reservations from other companies or regulatory bodies?

Yes, the deal faced opposition from both British and American regulators over competition concerns. Sony, a top rival, also expressed concerns that the acquisition could limit PlayStation users’ access to the Call of Duty series.

What are the terms of the newly structured deal related to cloud streaming rights?

Under the newly structured agreement, Microsoft will divest cloud streaming rights for all current and upcoming Activision games for the next 15 years to French gaming company Ubisoft Entertainment, except in the EU and three other European nations.

What led to the CMA’s reversal in decision?

The CMA postponed its final judgment to reconsider several factors, including a commitment from Microsoft to license Activision titles to cloud gaming platforms on a royalty-free basis and an agreement to make Call of Duty available on the PlayStation platform for at least 10 years.

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8 comments

TechFan21 October 13, 2023 - 10:00 am

Thats a ton of money, 69 billion! Microsoft is taking over everything, aren’t they? next stop world domination lol.

Reply
NostalgiaNerd October 13, 2023 - 1:06 pm

Man, remember when gaming companies were independent and not part of tech empires? those were the days.

Reply
ConsoleWarrior October 13, 2023 - 4:49 pm

Sony should be worried. Microsoft keeps buying up game studios. What’s their answer gonna be?

Reply
JaneDoe October 14, 2023 - 1:20 am

Wow, this is huge for Microsoft and the gaming industry. But what does it really mean for us, the gamers? More expensive games? Less choices? Not sure I like where this is heading.

Reply
PolicyMaven October 14, 2023 - 7:27 am

Regulatory approval here is interesting. It sets a precedent for future tech acquisitions. Wonder what the critics will say now.

Reply
BusinessGuru October 14, 2023 - 7:45 am

This deal could be a game changer in cloud computing. Microsoft gaining Activision’s IPs can really push the Xbox cloud service to new heights.

Reply
CryptoKnight October 14, 2023 - 8:06 am

Microsoft could even integrate blockchain tech into Activision games. The possibilities are endless.

Reply
EconWatcher October 14, 2023 - 8:26 am

Curious how this impacts competition long-term. Regulators seemed hesitant but finally gave the go-ahead. Hope it doesn’t stifle innovation.

Reply

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