In a significant development, Microsoft's nearly two-year endeavor to acquire gaming titan Activision Blizzard has reached fruition. The UK's Competition and Markets Authority (CMA) has endorsed a restructured deal, mitigating concerns over Microsoft's potential monopoly in the cloud gaming sector.
The Core of the Deal: Activision’s Cloud-Streaming Rights
To navigate regulatory hurdles, Microsoft conceded Activision's cloud-streaming rights, which will now be acquired by Ubisoft, the renowned French video game publisher. Ubisoft will have these rights for all PC and console games outside the European Economic Area (EEA) for 15 years. Within the EEA, however, both Ubisoft and Microsoft will have access to cloud-streaming rights for Activision's titles.
Sarah Cardell, CMA's chief executive, emphasized that this strategic move ensures Microsoft doesn't monopolize the burgeoning cloud gaming arena. This decision is designed to foster competitive pricing, enhance services, and expand user choice.
The Journey of the Acquisition
Announced in January 2022, Microsoft's aspiration to purchase Activision Blizzard for a staggering $68.7 billion would make it the third-largest gaming entity globally, following Tencent and Sony. This acquisition implies control over gaming powerhouses such as World of Warcraft and Call of Duty.
Despite approvals from the European Commission and the U.S. Federal Trade Commission's inability to obstruct the deal, the UK had consistent reservations. CMA's concerns centered around Microsoft's already dominant position in cloud gaming, amplified by Windows' widespread adoption and their significant cloud infrastructure business.
However, after Microsoft proposed divesting cloud streaming rights of all present and future Activision games to Ubisoft, the UK began warming up to the idea. Recognizing the proposal as a pro-competition "gamechanger," the CMA eventually backed the deal.
Throughout the 21-month acquisition process, the CMA has shown its determination to ensure competitive dynamics in the gaming industry. They lauded their own efforts in guiding Microsoft towards the final agreement, while also pointing a critical finger at Microsoft's initial reluctance to adapt to the CMA's concerns.
As Microsoft integrates Activision Blizzard into its fold, the gaming world anticipates the future synergies and innovations this union will bring.