GG Microsoft! UK clears $69B Activision Blizzard deal

After a lengthy process of regulatory scrutiny, the biggest deal in gaming history finally has the all-clear. Today, the final hold-out in the saga, the UK’s CMA, said it had approved Microsoft’s acquisition of Activision Blizzard, after the parties had made “gamechanging” amendments to the terms. 

The antitrust watchdog stated it had been swayed by Activision’s agreement to sell its streaming rights to Ubisoft Entertainment. What this effectively means is that its blockbuster video games will not become exclusively available via streaming to Microsoft Xbox gamers following the takeover. 

“The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers,” the CMA said in a statement.

According to Statista, revenue in the cloud gaming market is projected to reach $4.34bn (€4.1bn) in 2023. It could then show an annual growth rate of 44.09%, which would result in a market volume of $18.71bn (€17.7bn) by 2027.

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With the approval, Microsoft now has the opportunity to close the $69bn (€65.4bn) deal by October 18, three months after the original deadline. 

CMA decidedly unhappy with Microsoft tactics 

Activision Blizzard makes household franchises such as Call of Duty, World of Warcraft, and Candy Crush. Microsoft first announced its intention to purchase the Fortune 500 video game publisher in early 2022. When the CMA blocked the deal in April this year, Microsoft said the UK was “closed for business,” and that it was the “darkest day” in its 40 years operating in the country.

The EU granted its approval in May 2023, while US regulators followed suit in July. Meanwhile, the lengthy back and forth with the UK watchdog has been one of the most publicised and contentious antitrust processes in Britain to date.

CMA chief executive Sarah Cardell said the agency had delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed concerns and “we stuck to our guns on that.” She further added that the CMA’s decision had been “free from political influence” and that the agency would not be “swayed by corporate lobbying.” 

“Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA,” Cardell stated, in what could be considered a less than entirely amicable tone. 

Hard to remember a more fractious affair, competition advisor says

Indeed, the CMA’s statements appear to lay down a marker that publicly litigating appeals against the agency in the press will be “seen in an exceedingly poor light in the future.” That is according to Gareth Mills, who is a partner at law firm Charles Russell Speechlys and advises on commercial dispute resolution, regulatory, and competition matters. 

“In a UK context, it’s hard to remember a more fractious affair and the comments made by the CMA’s chief executive as part of the approval makes it clear that some of Microsoft’s tactics have left a bitter taste, despite the final collaborative resolution,” Mills told TNW. 

“Ultimately, this approval allows both sides to claim a satisfactory result. Microsoft have the deal finalised and the CMA can justifiably point to the remedies offered by Microsoft to facilitate the deal’s approval as evidence that its original rejection was a correct use of its powers.”

For its part, Microsoft was somewhat more conciliatory in its comments on the approval than the CMA. Brad Smith, the tech giant’s vice chair and president, said:

“We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.”