Microsoft’s ambition of acquiring the gaming colossus Activision has finally come to fruition as the UK’s Competition and Markets Authority (CMA) approves a revised proposal. This approval addresses concerns about Microsoft’s potential to monopolise the cloud gaming market.
Adjustments in cloud-streaming rights clinch the deal
We’ve cleared the new deal for Microsoft to buy Activision without cloud gaming rights.
— Competition & Markets Authority (@CMAgovUK) October 13, 2023
In August, Microsoft made a concession that would see Ubisoft, instead of Microsoft, buy Activision’s cloud gaming rights.
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The pivot that facilitated the approval hinges on a change concerning Activision’s cloud-streaming rights. Instead of migrating to Microsoft, these rights will go to Ubisoft, a notable French video game publisher. Ubisoft is set to own Activision’s cloud-streaming rights for all PC and console games for 15 years, although this arrangement extends only to markets outside the European Economic Area (EEA). Within the EEA, Ubisoft has been granted a “non-exclusive licence,” meaning Microsoft also retains access to cloud-streaming rights for Activision games in Europe.
Sarah Cardell, CMA Chief Executive, underscored that this setup thwarts Microsoft from dominating the ascendant cloud gaming market. “With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market,” she elucidated.
The long road to acquisition approval
The saga began when Microsoft disclosed its intention to annex Activision in a staggering US$68.7 billion deal in January 2022. This move was envisioned to catapult Microsoft to the third-largest gaming company globally by revenue, trailing only Tencent and Sony. It would also usher mega franchises like World of Warcraft and Call of Duty under Microsoft’s aegis.
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.
— Brad Smith (@BradSmi) October 13, 2023
While the European Commission (EC) and the Federal Trade Commission (FTC) in the US harboured reservations, they couldn’t thwart the deal. The UK, however, remained staunch in its resolve to inhibit the acquisition, fearing it would suffocate competition and prop Microsoft as the supreme overlord in the cloud gaming domain.
The dawn of a new epoch in cloud gaming
With the UK’s endorsement now in the bag, Microsoft is at the threshold of concluding its acquisition odyssey. This isn’t merely a routine business transaction but a seminal milestone poised to redefine the global gaming industry’s landscape.
As Microsoft stands on the verge of assimilating Activision, it gears to dive deeper into the cloud gaming sphere. This suggests a buoyant trajectory for Microsoft and the global gaming community as it awaits a new era of enriched gaming experiences.
The CMA’s approval has set the stage for Microsoft and Activision to commence their collaborative journey, promising to invigorate the cloud gaming landscape.
