Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc. was approved by the UK competition watchdog, removing the final major global regulatory hurdle that stood in the way of the biggest ever gaming deal completing.
The Competition and Markets Authority said Friday that Microsoft’s restructured offer to sell some gaming rights to French publisher Ubisoft Entertainment SA satisfied any competition concerns it had. The agency said it would preserve competitive prices and better services.
The deal has hung in the balance for months as it ran up against concerns from global antitrust regulators including an initial veto from the UK. Yet it gained unexpected momentum after Microsoft beat the Federal Trade Commission’s court challenge over the deal. The European Union cleared the deal with behavioral remedies in May. That left the CMA as the one regulator standing in the way of the deal.
“We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that,” said Sarah Cardell, the chief executive officer of the CMA.
By the summer Microsoft resubmitted a substantially different deal to the CMA in one final push to get the deal— that would include the blockbuster title Call of Duty—over the line.
Microsoft and Activision agreed to extend the deal deadline to Oct. 18.
“We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide,” said Brad Smith, Microsoft’s vice chair and president.
Once the deal finalizes, Microsoft will oversee some of gaming’s most storied franchises including Call of Duty, mobile game Candy Crush and Diablo.
In recent years, Microsoft has been buying up game companies in an effort to bring top games to its ecosystem of Xbox consoles, Windows PCs and game subscription service Game Pass. Currently, Microsoft is the third place console company behind Sony and Nintendo.
Microsoft executives have said that the deal is the tech giant’s way of breaking into the $93 billion mobile gaming market. However, UK regulators instead fixated on Microsoft’s potential to dominate the nascent cloud gaming market.
With Activision’s games, Microsoft could draw more customers into its cloud gaming service, a feature of Game Pass. Analysts have pointed out that cloud gaming has remained niche. Google and Amazon have both struggled to gain a foothold in it.
The EU said the changes to the deal would not need to go through another approvals process in Brussels, according to a statement Friday. The European Commission also said that the UK commitments do not interfere with Microsoft’s in the EU.
The FTC is continuing to challenge the deal even after it closes, although it is unlikely to derail completion. The agency said it will move forward with its in-house trial against the acquisition.
The CMA said Friday it did identify “limited residual concerns” with the new deal, but Microsoft gave undertakings that will make the terms of the rights sold to Ubisoft enforceable by the CMA.
“The CMA’s official approval is great news for our future with Microsoft, and we look forward to becoming part of the Xbox Team,” an Activision spokesperson said.
