The UK’s Competition and Markets Authority has “provisionally” approved Microsoft’s plan proposed purchase of Activision-Blizzard-King, potentially putting the deal one step closer to action.
Microsoft’s plan to purchase Activision-Blizzard-King for a staggering $68.7 billion has been going on for quite some time, largely due to how many marketing bodies have had to approve such a big purchase. One of the biggest roadblocks (aside from Sony) that the company has had to contend with since announcing the deal is the UK’s CMA, a marketing regulator that initially blocked the deal from happening back in April, largely due to its concerns for the impact the purchase would have on cloud gaming.
After the deal was blocked, it was clear that Microsoft would have to make some concessions in order to win over the CMA and get the deal moving again. Today, the CMA confirmed in a statement released on Gov.UK that the new deal put forward by Microsoft is enough for it to have “provisionally” accepted the deal, although it is yet to make a final decision.
The statement from the CMA reads, “While the CMA has identified limited residual concerns with the new deal, Microsoft has put forward remedies which the CMA has provisionally concluded should address these issues. The CMA is now consulting on the remedies before making a final decision.”
According to the CMA, after the deal was blocked in April, Microsoft shared a “restructured transaction” in August for the CMA to review. In that new deal, Microsoft said that it would not be purchasing the cloud gaming rights held by Activision which the CMA was worried would impact competition in the industry, and that they would instead be sold to Ubisoft, an independent third party, before the deal is completed.
Regarding the new deal, the CMA said, “The prior sale of the cloud gaming rights will establish Ubisoft as a key supplier of content to cloud gaming services, replicating the role that Activision would have played in the market as an independent player. In contrast to the original deal, Microsoft will no longer control cloud gaming rights for Activision’s content, so would not be in a position to limit access to Activision’s key content to its own cloud gaming service or to withhold those games from rivals.”
The CMA concludes by stating that, although the restructured deal is “materially different to the previous transaction and substantially addresses most concerns”, the CMA’s concerns about the purchase affecting competition in cloud gaming are now more limited and enough for it to “provisionally” conclude that that the additional steps should “resolve those residual concerns”. A consultation on the new deal is now open until October 6, so we should be finding out about the final decision soon.
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