Microsoft Adjusts Activision Merger Deal to Address CMA's Concerns

Microsoft Adjusts Activision Merger Deal to Address CMA's Concerns

News by Nikola DjuricNikola Djuric
Published: August 22, 2023

In a fresh approach to acquiring the acclaimed video game manufacturer Activision Blizzard, Microsoft introduced revised conditions aiming to gain approval from the United Kingdom's market regulator, the Competition and Markets Authority (CMA).

The previous $69 billion bid had been halted by the CMA in April due to concerns regarding potential monopolistic power in the emergent cloud gaming domain.

Microsoft's latest proposal delineates the company will forgo acquiring cloud rights outside of Europe for current Activision Blizzard games, as well as any new titles released in the ensuing 15 years. This strategic maneuver reignites Microsoft's aspiration to acquire renowned titles such as Call of Duty, World of Warcraft, and Candy Crush.

Despite cloud game streaming being a niche, the CMA expressed reservations that a merger between Microsoft - who has been pushing for cloud gaming technology - and a major game publisher like Activision, might stifle competition. However, this stance seemed increasingly solitary, given that the deal received a nod from regulators in the European Union and the United States.

A pivotal change is the transfer of cloud streaming rights for Activision's games outside the European Economic Area (EEA). These rights will be sold to the French game developer Ubisoft before Microsoft finalizes the acquisition.

In exchange, Ubisoft will provide Microsoft with an undisclosed payment. Moreover, Ubisoft will possess the rights to license Activision's content to any cloud gaming provider, encompassing potential multi-game subscription platforms.

This reconfiguration signifies that post-acquisition, Microsoft will not reserve the exclusive right to release Activision Blizzard games solely on Xbox Cloud Gaming, nor will they singularly determine the licensing terms for Activision Blizzard games on rival platforms.

Contrarily, Ubisoft will govern the streaming rights for Activision Blizzard games outside the EU and will license these titles back to Microsoft for inclusion in Xbox Cloud Gaming.

The deal has set off a fresh regulatory review by the CMA and is anticipated to conclude by October 18.

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