UK competition watchdog clears Microsoft’s acquisition of Activision

Britain’s competition regulator has cleared Microsoft’s acquisition of Call of Duty maker Activision Blizzard after the restructured deal substantially addressed its earlier concerns.

In a statement on Friday, the UK’s Competition and Markets Authority (CMA) said Microsoft’s revised offer to sell some gaming rights to a third company, French publisher Ubisoft Entertainment, satisfied any competition concerns it had. The agency said the arrangement would preserve competitive prices and better services.

“The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers,” the UK’s Competition and Markets Authority (CMA) said in a statement.

Microsoft announced the biggest gaming deal in history in early 2022, but the $69 billion (€65.45bn) acquisition was blocked in April by Britain’s competition regulator, which was concerned the US computing giant would gain too much control of the nascent cloud gaming market.

Yet the deal gained unexpected momentum after Microsoft beat the US Federal Trade Commission’s court challenge over the deal.

The European Union then cleared the acquisition with behavioural remedies in May, leaving only the UK’s CMA to standing in the way.

“We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that,” said Sarah Cardell, chief executive of the CMA.

Once the deal is made final, Microsoft will oversee some of gaming’s most storied franchises including Call of Duty, mobile game Candy Crush and Diablo.

In recent years, Microsoft has been buying up game companies in an effort to bring top games to its ecosystem of Xbox consoles, Windows PCs and game subscription service Game Pass. Currently, Microsoft is the third place console company behind Sony and Nintendo.

Microsoft executives have said that the deal is the tech giant’s way of breaking into the $93 billion mobile gaming market. However, UK regulators instead fixated on Microsoft’s potential to dominate in the nascent cloud gaming market.

With Activision’s games, Microsoft could draw more customers into its cloud gaming service. Analysts have pointed out that cloud gaming has remained niche. Google and Amazon have both struggled to gain a foothold in it. – Bloomberg, Reuters

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