Microsoft is clearing the final hurdles in its aim to acquire video gaming giant Activision Blizzard following a restructured $69 billion deal.
UK competition regulators have indicated that Microsoft's restructured $69 billion (€65 billion) deal to acquire video game giant Activision Blizzard is on track to receive antitrust approval.
The Competition and Markets Authority (CMA) released a statement on Friday stating that the updated proposal "substantially addresses previous concerns" regarding potential competition issues in the rapidly growing cloud gaming market.
The primary concern was whether the acquisition would stifle competition in the cloud gaming sector, where games are streamed to devices like tablets and phones, eliminating the need for expensive gaming consoles and computers.
The revised offer has now garnered optimism from the CMA, signalling a potential green light for the deal.
However, there are still some lingering concerns and Microsoft has presented remedies to address these issues. The CMA is currently seeking feedback on these proposed fixes before making a final decision.
The development indicates that the UK watchdog is moving closer to reversing its earlier decision to block the acquisition, thus removing one of the final obstacles for the historic tech transaction.
Sarah Cardell, CEO of the CMA, reiterated the regulator's consistent stance, emphasising that the merger could only proceed if it preserved competition, innovation, and choice in cloud gaming.
"In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns," she said.
Negotiation is the name of the game
Microsoft's acquisition of Activision Blizzard, famous for its gaming series such as Call of Duty and World of Warcraft, has already received approvals from antitrust authorities in over 40 countries, including a crucial green light from the European Union.
The company agreed to allow users and cloud gaming platforms to stream its titles without paying royalties for 10 years as part of the EU approval.
In the UK, the deal faced opposition from regulators who were concerned about its potential impact on competition and gamers. To address these concerns, Microsoft extended the deal's original deadline to mid-October and underwent a new investigation into the revised proposal.
Microsoft President Brad Smith expressed encouragement at this positive development in the UK watchdog's review process. He said the company's commitment to resolving any remaining concerns related to cloud game streaming.
Under the restructured deal, Microsoft will sell the cloud streaming rights for all current and new Activision games released over the next 15 years to French game studio Ubisoft Entertainment, but only outside of the EU and three other European countries.
This development marks a significant step forward for Microsoft's acquisition of Activision Blizzard, with the UK regulator's provisional approval paving the way for final approval before the extended deadline of October 18.