Microsoft on the home stretch for Activision deal
UK's Competition and Markets Authority (CMA) approved Microsoft's revised deal to purchase Activision Blizzard. This follows months of scrutiny by the CMA, which had initially blocked the deal on concerns that it would harm competition in the video game industry.
The acquisition, which is valued at $68.7 billion, is one of the largest in tech history. It would give Microsoft control over some of the most popular video game franchises in the world, including Call of Duty, Candy Crush, and World of Warcraft.
The CMA's decision to approve the deal is a significant victory for Microsoft. It removes a major obstacle to its plan to become a major player in the video game industry and to challenge Sony and Nintendo for market dominance
See Competition & Markets Authority's latest xeet/tweet below.
This new deal will stop Microsoft from locking up competition in cloud gaming, preserving competitive prices and services for UK cloud gamers.
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— Competition & Markets Authority (@CMAgovUK) October 13, 2023
CMA's initial concerns
When Microsoft first announced its plans to acquire Activision Blizzard in January 2022, the CMA raised a number of concerns about the deal. One of its biggest concerns was that Microsoft would gain too much control over the video game industry and that this would harm competition.
The CMA also worried that Microsoft would use its ownership of Activision Blizzard's games to give its own gaming platform, Xbox, an unfair advantage over its rivals.
Microsoft's concessions
In order to address the CMA's concerns, Microsoft made a number of concessions. One of the most significant concessions was to agree to sell Activision Blizzard's cloud gaming rights to Ubisoft. This was intended to prevent Microsoft from gaining too much control over the cloud gaming market.
Microsoft also agreed to make a number of commitments to ensure that it would continue to compete fairly with its rivals. For example, it agreed to not make any exclusive deals with Activision Blizzard's games and to continue to license those games to other platforms.
The CMA's decision
In its final decision, the CMA concluded that Microsoft's revised deal was unlikely to harm competition in the video game industry. The CMA said that Microsoft's concessions had addressed its concerns and that the deal would not lead to higher prices or lower quality products for consumers.
The CMA's decision is a positive outcome for both Microsoft and Activision Blizzard. It allows Microsoft to proceed with its acquisition and to grow its gaming business. It also gives Activision Blizzard a new owner with the resources to invest in its games and grow its business.
Implications of the deal
The Microsoft-Activision Blizzard deal is likely to have a significant impact on the video game industry. It is likely to lead to increased consolidation in the industry, as Microsoft and other large players become more dominant.
The deal could also have an impact on the way that video games are developed and distributed. Microsoft is likely to invest heavily in Activision Blizzard's games and make them available on a wider range of platforms. This could lead to more innovative and higher quality games for consumers because let's be honest, Blizzard is not in a good shape lately.
Featured image credit: Microsoft.
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