Microsoft acquisition of Activision Blizzard provisionally approved by UK’s CMA

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Microsoft’s planned acquisition of Activision Blizzard has been provisionally approved by the UK’s Competition and Markets Authority (CMA), largely the result of Activision Blizzard’s sale of cloud gaming rights to Ubisoft.

“The sale of Activision’s cloud gaming rights to Ubisoft substantially addresses previous concerns and opens the door to the deal being cleared,” the CMA said in a press release.

“In particular, the sale of Activision’s cloud streaming rights to Ubisoft will prevent this important content – including games such as Call of Duty, Overwatch, and World of Warcraft – from coming under the control of Microsoft in relation to cloud gaming,” the press release continued.

“The CMA originally found that Microsoft already has a strong position in cloud gaming services and could have used its control over Activision content to stifle competition and reinforce this position. The new deal instead results in the cloud streaming rights for Activision’s games being transferred to an independent player, Ubisoft, maintaining open competition as the market for cloud gaming develops over the coming years.”

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

“It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”

Microsoft, as you’d expect, is pleased with this result.

“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 18th October deadline,” said president Brad Smith.