Microsoft’s acquisition of Activision Blizzard has been a long and arduous journey, with regulatory hurdles and concerns raised by various countries and authorities. However, the recent development where the United Kingdom’s competition authority is leaning towards validating the takeover project is a significant step forward for Microsoft.
The acquisition, announced in January 2022 for a whopping $68.7 billion, has faced scrutiny and resistance in multiple regions. It’s worth noting that Microsoft has already received approval for its project in the European Union and China, and it successfully defended its case against the Federal Trade Commission (FTC) in the United States.
The concerns raised by the UK primarily revolved around the potential dominance of the cloud gaming market by Microsoft, especially concerning iconic franchises like Call of Duty. To address these concerns, Microsoft introduced a new aspect to the takeover project in August 2023. This involved reselling the rights to cloud gaming games to Ubisoft, a prominent player in the gaming industry.
The British competition authority now appears to be more receptive to the updated takeover project. They have stated that the new proposal “brings significant changes which largely address the concerns it had expressed about the initial operation at the start of the year.”
However, there is still a caveat to be addressed—the quality of the contract between Microsoft and Ubisoft, as well as Microsoft’s ability to circumvent this contract for the sale of cloud gaming game rights. To address this concern, Microsoft has agreed to allow the British competition authority (CMA) to monitor and take action regarding the contract.
Both Activision Blizzard and Microsoft have expressed their satisfaction with this development. Bobby Kotick, CEO of Activision Blizzard, called it an “important step for the merger,” while Brad Smith of Microsoft said, “we are encouraged by this positive development in the CMA review process.”
Despite this positive development, it’s important to note that the takeover project has not been definitively validated by the United Kingdom. The authority has opened a consultation period until October 6 to gather feedback from Microsoft’s competitors. Assuming no unforeseen surprises arise, Microsoft is expected to eventually receive the green light for the merger with Activision Blizzard.
This acquisition is poised to have a significant impact on the gaming industry, as it brings together two giants in the field. Microsoft’s Xbox Game Pass, which offers a vast library of games to subscribers, is set to expand further with the addition of Activision Blizzard’s portfolio, which includes popular franchises like Call of Duty, World of Warcraft, and Overwatch.
Overall, Microsoft’s determination to navigate the complex regulatory landscape and address concerns from various authorities highlights the company’s commitment to this acquisition, which could reshape the gaming industry in the coming years. Gamers and industry observers will be watching closely as this merger moves closer to fruition.