The UK's top competition regulator approved Microsoft's proposal to acquire gaming company Activision Blizzard for $69 billion on Friday (October 13th), clearing the last major obstacle to the completion of this transaction.
The UK Competition and Market Authority (CMA) stated that it has approved Microsoft's acquisition of Activision, which does not include authorization for cloud games in the revised acquisition plan.
CMA stated in a statement on Friday that as the cloud gaming market expands, the new acquisition plan will avoid Microsoft easily dominating the competition in the cloud gaming field and preserve competitive prices and services for UK cloud gaming customers.
Microsoft President Brad Smith responded, "We are grateful for CMA's thorough review and decision today. We have now overcome the ultimate regulatory hurdles and completed this acquisition, which we believe will benefit players and the gaming industry worldwide
October 18th is the deadline for Microsoft to complete the Blizzard acquisition case, and the UK CMA's nod of agreement means that Microsoft has finally obtained a critical pass at the last moment before closing the trading gate.
Last Opponent
This move marks a significant shift in CMA's attitude. CMA has always been the strongest opponent of this acquisition case.
As early as January last year, Microsoft announced plans to acquire Activision Blizzard for a transaction price of $68.7 billion. Global regulatory agencies are concerned that this acquisition will reduce competition in the global gaming market, especially in the cloud gaming market.
The cloud gaming market is seen as the next frontier in the industry, as it can run games on cloud servers, providing players with almost the same gaming experience as local games, and offering subscription services. Cloud games can even eliminate the need for expensive gaming consoles, allowing users to play games on PCs, phones, and televisions.
This has also become the main reason for CMA's opposition. In April of this year, the UK CMA blocked this transaction on concerns about affecting fair competition in the cloud gaming market, but Microsoft was given the opportunity to modify its acquisition plan.
In order to break through the "final obstacle" of CMA in the UK, Microsoft has made significant concessions: Microsoft stated that it will not obtain cloud access to Activision's existing PC and console games, nor will it obtain cloud access to Activision's new games released in the next 15 years. The company has also submitted a new restructuring transaction plan, deciding to sell the cloud streaming rights of Activision Blizzard's existing games and new games released within the next 15 years to Ubisoft Entertainment in France.
Due to this concession from Microsoft, CMA has agreed to re-examine this transaction and launched a new investigation in August. The investigation has ended today
Recently, there were also reports that Microsoft's revised acquisition plan is expected to avoid a new investigation by the European Union. According to insiders, the European Commission has concluded that the Microsoft acquisition amendment, which is currently seeking CMA support, does not need to go through the EU's approval process.