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U.K. regulator accepts changes to the Microsoft Activision deal

Microsoft - Activision Blizzard

After months of legal roadblocks and hearings, Microsoft has now finally passed one of the last major regulatory barriers in its proposed $75 billion takeover of Activision Blizzard.

Microsoft initially announced plans to buy Activision back in January 2022. Now, after adequately resolving concerns regarding fair trade and the monopolization of the market, authorities in the UK have finally reached a verdict and given the ‘ok’ for the adjusted deal to go ahead.

On Friday, The UK Competition and Markets Authority (CMA) announced that the terms of the new deal submitted by Microsoft will sufficiently reduce any potential concerns for harming competition in the retail or cloud gaming market.

As part of the approval, other enterprises in the gaming marketplace will be asked for their feedback on Microsoft’s proposal before a final decision is made. The initial deal was rejected by the UK regulator and has proved to be the biggest obstacle standing in the way of the merger of the two companies being completed.

According to the CMA, Microsoft’s motion to restructure the takeover deal to allow Activision to sell its cloud gaming rights to Ubisoft is suitable grounds for the deal to be given the all-clear. As part of the reworked terms, Microsoft will be required to give up all cloud-streaming rights for Activision franchises such as Call of Duty, in many parts of the world.

It has been over a year and a half since the takeover was blocked by competition regulatory bodies worldwide. Since then, Microsoft has been granted approval for the deal to go ahead in Europe, Asia, and South America. It was mostly just the authorities in the UK and the United States that were holding up the deal and it even looked likely at one stage that the deal might fall apart altogether as a result.

Now though, Microsoft’s revised proposal is being seriously considered by the CMA to be given the full green light. Some have criticized the CMA’s turnaround, stating that its decision may have been swayed by the criticism it faced after it had rejected Microsoft’s initial proposal.

However, the new deal is substantially different, and a lot fairer in terms of keeping cloud distribution of Activision’s AAA titles in the control of a major independent supplier, Ubisoft, instead of in Microsoft’s hands.

The CMA should be given credit for its role in making that happen. Online, both Microsoft and Activision have publicly broadcasted their encouragement for the development and have praised The CMA and its preliminary decision.

Microsoft will continue to work diligently to earn full approval before the scheduled deadline of Oct 18. On that day, the final deadline for Microsoft’s extended takeover agreement of Activision is set to expire.

Microsoft has also put forward some further proposed solutions to the CMA’s residual concerns and these will also be considered before a final decision is reached. These examinations are expected to last until Oct. 6.

The main focus of the UK regulators will now be on what impact the deal might have on the future of the cloud gaming market. Cloud gaming has become increasingly popular in recent years as it allows gamers to stream movies and games on practically any device with a screen that can be connected to the internet.

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