London

The United Kingdom's competition regulators have agreed to clear the final legal hurdle in Microsoft's ambitious $69 billion acquisition of Activision Blizzard Inc., according to a report by Bloomberg. It has taken more than a year and a half to reach this point in the process of concluding the biggest gaming deal in history.

Advertisment

The proposed concessions by Microsoft clear the way for the deal, according to the Competition and Markets Authority (CMA), which made the declaration on Friday. According to the regulator, the revised proposal, which involves the transfer of gaming rights to the French publisher Ubisoft Entertainment SA, will foster healthy competition in the field of cloud gaming for many years to come. By October 6, the CMA wants to hear from the public about this offer.

This development marks a significant turn of events for a deal that had previously faced significant obstacles, including early objections from antitrust regulators, including a veto from the UK earlier this year. Following Microsoft's court triumph over the Federal Trade Commission's opposition to the transaction, it began to make a comeback. The CMA was the final regulatory obstacle after the European Union eventually approved the purchase in May, although with additional minor restrictions.

Bloomberg quoted Colin Raftery, a senior director of mergers at the CMA, who highlighted the transformation of the deal, stating, "This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft."

Advertisment

Although the agreement has taken longer than expected to materialise, it is the cornerstone of a strategy by Xbox CEO Phil Spencer to revive Microsoft's flagging mobile gaming market. Spencer now challenged with implementing this plan in a gaming environment that has changed, with a lesser focus placed on the metaverse, which was once hailed as the acquisition's motivating factor.

Microsoft's stock price was mostly unchanged as of 9:10 a.m. in Germany, while Activision's stock price increased by 1.3 per cent. Ubisoft's stock increased by as much as 3.26 per cent in Paris.

Brad Smith, a Microsoft executive, expressed optimism about the CMA's progress. "We are encouraged by this positive development in the CMA's review process. We presented solutions that we believe fully address the CMA's remaining concerns related to cloud game streaming," Bloomberg quoted him as saying.

Advertisment

Activision's CEO, Bobby Kotick, acknowledged the critical importance of the CMA's preliminary approval, stating in a blog post, "The CMA's preliminary approval of our merger is critical to completing the deal."

The CMA had previously rejected the agreement, citing possible repercussions like increased costs, fewer options, and decreased innovation for UK gamers. According to the regulator, the newly proposed rules prevent Microsoft from limiting access to Activision's essential content to just its own cloud gaming service or from withholding these titles from rivals.

The CEO of the CMA, Sarah Cardell, emphasised that it would have been preferable if Microsoft had presented this restructuring during the initial investigation, highlighting the expenses, ambiguity, and delays that can result from failing to promptly offer a workable and efficient remedy option.

(With inputs from Bloomberg)

WATCH WION LIVE HERE