Microsoft's Latest Offer Approved by UK Regulators to Buy Call of Duty Maker Activision Blizzard

The Competition Markets Authority (CMA) in the UK has granted approval for Microsoft's revised offer to acquire Call of Duty-maker, Activision Blizzard.

The initial $69 billion deal was blocked by the CMA in April, citing concerns. However, the updated bid has now received the regulatory nod, along with additional conditions.

Key Points from the CMA's Decision

1. CMA's Concerns Addressed: The CMA indicated that the revised offer addressed its concerns regarding competition in the gaming market.

2. Distribution Rights to Ubisoft: As part of the deal, Microsoft will transfer the distribution rights for Activision's games on consoles and PCs over the cloud to Ubisoft, a French gaming company. This move is intended to ensure that Microsoft does not have a stranglehold on the emerging cloud gaming market.

3. Criticism of Microsoft: Despite approving the acquisition, the CMA criticized Microsoft for its approach and tactics during the regulatory process. The authority expressed its disapproval of Microsoft's insistence on a package of measures that had been previously deemed unworkable. The CMA views this as a waste of time and resources.

Impact on the Gaming Industry

This deal significantly reshapes the gaming industry and solidifies Microsoft's position as a major player in the sector. It also poses a challenge to Sony, the owner of the PlayStation console, who has raised concerns that key Activision titles like Call of Duty might eventually become Xbox exclusives. Sony has been a vocal opponent of the acquisition.

The road to this approval has been marked by regulatory challenges not only in the UK but also in the US and Europe. The initial proposal to acquire Activision was made by Microsoft in January 2022. Since then, the deal faced scrutiny and opposition from regulatory bodies, primarily concerning competition and the potential monopolization of cloud gaming.

To overcome these hurdles, Microsoft offered several concessions. One of the central points was to divest the cloud streaming rights for Activision games to Ubisoft. This step is expected to prevent Microsoft from having an undue influence on the cloud gaming market.

Future of Cloud Gaming

Cloud gaming is seen as the next frontier in the industry, offering subscription services that enable gamers to stream titles without the need for expensive consoles. The potential for cloud gaming to transform how people access and play games is significant, making it a key focus for major tech companies.

This deal follows the trend of consolidation within the gaming industry. With Bethesda's acquisition, Microsoft already demonstrated its strategy of exclusive titles for Xbox and PC. As the acquisition of Activision Blizzard is finalized, Microsoft's influence over game development and distribution will likely continue to grow.

Sony's Concerns

Sony, a key competitor to Microsoft, has voiced concerns about this acquisition, particularly due to the possibility of major game titles becoming exclusive to Xbox platforms. The competition between these two giants in the gaming world remains intense.

For Microsoft, this approval marks the final regulatory hurdle in its path. The company's president, Brad Smith, expressed gratitude for the CMA's review and decision, believing that it will benefit players and the gaming industry worldwide.

As this acquisition reshapes the gaming landscape, the industry will closely watch how Microsoft utilizes its newly acquired assets and navigates the complex challenges and opportunities in the gaming market.