Microsoft's Acquisition of Activision Blizzard Finds Bright Spots from UK CMA

Microsoft's acquisition of Activision can be bright spot (photo: Activision Blizzard)

JAKARTA - Microsoft's acquisition of Activision Blizzard is still pending in the final decision of the UK Competition and Markets Authority (CMA).

To get a deal from the CMA, some time ago Microsoft restructured its acquisition agreement, which specifically stated that Activision games such as Call of Duty and others would not be exclusive to Microsoft's gaming platform.

In its latest news, the CMA released a statement on Friday, September 22, stating that the updated proposal “substantially addresses previous concerns” regarding potential competition issues in the fast-growing cloud gaming market.

We are encouraged by this positive development in the CMA’s review process. We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18…

— Brad Smith (@BradSmi) September 22, 2023

The main concern is whether the acquisition will stifle competition in the cloud gaming sector, where games are streamed to devices such as tablets and phones, eliminating the need for expensive game consoles and computers.

However, in this new deal,  Microsoft no longer controls cloud gaming rights to Activision content, so it cannot limit access to key Activision content to its cloud gaming services or withhold games from its competitors

So, the CMA tentatively concludes that this additional protection will resolve the remaining issues. The CMA has now opened a consultation, until, October 6, on Microsoft's proposed solution.

"This is a new and very different deal, which puts cloud distribution of these important games in the hands of a powerful independent supplier, Ubisoft, and not under the control of Microsoft," said Colin Raftery, senior director of mergers and Phase 1 decision maker in his official statement.

Sarah Cardell, CEO of the CMA, also said that the regulator's stance is consistent, emphasizing that the merger can only proceed if it maintains competition, innovation, and choice in cloud gaming.

“In response to our initial ban, Microsoft has now substantially restructured the deal, taking the necessary steps to address our initial concerns,” she said.

“However, it would have been much better if Microsoft had proposed this restructuring during our initial investigation. "This case illustrates the costs, uncertainty and delays that parties can incur if credible and effective resolution options are not proposed in a timely manner," she concluded.