Microsoft’s US$69 billion deal for Activision closer to UK approval

British competition regulators signaled Friday that Microsoft’s restructured US$69 billion deal to buy video game maker Activision Blizzard is likely to receive antitrust approval.

The Competition and Markets Authority said the revamped proposal “substantially addresses previous concerns” about stifling competition in the fast-growing cloud gaming market, which frees players from buying expensive consoles and gaming computers by streaming games to tablets, phones and other devices.

The updated offer “opens the door to the deal being cleared,” the watchdog said, though there are lingering concerns. Microsoft has offered remedies that the watchdog provisionally decided will resolve those issues, and regulators are now getting feedback on those fixes before making a final decision.

The announcement shows the U.K. watchdog is closer to reversing its earlier decision to block Microsoft from taking over the maker of hit gaming franchises like Call of Duty and World of Warcraft, removing a final obstacle for one of the largest tech transactions in history.

 “The CMA’s position has been consistent throughout — this merger could only go ahead if competition, innovation and choice in cloud gaming was preserved,” CEO Sarah Cardell said. “In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns.”

Since the deal was announced in January 2022, Microsoft has secured approvals from antitrust authorities covering more than 40 countries. Crucially, it got a thumbs-up from the 27-nation European Union after agreeing to allow users and cloud gaming platforms to stream its titles without paying royalties for 10 years.

But it hit a roadblock in Britain, where regulators feared Microsoft’s purchase of Activision would harm competition and hurt gamers.

The companies agreed to extend the original July deadline for the deal to close to mid-October to try to overcome the British regulator’s objections. The CMA then put its original decision on hold and opened a new investigation into the revamped proposal.

Microsoft President Brad Smith said the company is “encouraged by this positive development” in the U.K. watchdog’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 deadline.”

Under the restructured deal, Microsoft will sell off cloud streaming rights outside of the EU and three other European countries for all current and new Activision games released over the next 15 years to French game studio Ubisoft Entertainment. – AP 

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