Xbox-owner Microsoft is edging closer to finalising its $69 billion acquisition of the video game giant Activision Blizzard, the creator of ‘Call of Duty.’ The UK regulatory body, on Friday, gave its approval for the revamped deal, addressing previous regulatory concerns.
Microsoft, a US tech giant, initiated this bid early last year, aiming to secure its position as the world’s third-largest gaming company by revenue, following China’s Tencent and Japan’s PlayStation maker, Sony.
This acquisition has undergone rigorous scrutiny from both US and UK regulators. The Competition and Markets Authority (CMA) in the UK had previously blocked an earlier version of the deal in April. However, the CMA, in its recent statement, mentioned that the “restructured deal makes important changes” and paves the way for potential clearance. The CMA will now consult on the required “remedies” before making a final decision.
Microsoft’s Vice Chairman and President, Brad Smith, expressed optimism about the CMA’s review process, stating, “We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work towards earning approval to close the deal by October 18.”
Bobby Kotick, CEO of Activision Blizzard, which also produces popular games like ‘Diablo’ and ‘Candy Crush,’ hailed the UK regulator’s announcement as “a significant milestone for the merger.”
The revised proposal submitted by Microsoft to the CMA last month significantly alters the deal. Notably, it ensures that the cloud distribution of these critical games remains with a strong independent supplier, Ubisoft Entertainment, instead of coming under Microsoft’s control. Colin Raftery, Senior Director of Mergers at the CMA, emphasised this change.
The original concerns of the CMA have been addressed, according to its Chief Executive, Sarah Cardell. She noted, however, that presenting this restructuring during the initial investigation would have been preferable, emphasising the costs and delays incurred when effective remedies are not proposed promptly.
Outside the UK, the European Union approved the deal in May, while the US antitrust regulator temporarily halted its efforts to block the acquisition after a legal setback.
Regulators have been concerned about Microsoft potentially restricting access to highly popular games by making them exclusive to the Xbox platform. In July, Microsoft and Sony reached an agreement to continue releasing the ‘Call of Duty’ video game on the PlayStation console, resolving previous disputes where Sony sought to oppose Microsoft’s acquisition of Activision Blizzard.”