The Competition and Markets Authority (CMA) in Britain has approved the proposed $69 billion acquisition of Activision Blizzard Inc. ATVI by Microsoft Corporation MSFT. This approval comes after Microsoft made concessions to allay competition fears.
What Happened: Microsoft has secured the approval after agreeing to sell Activision’s game streaming rights, including the popular “Call of Duty”, to Ubisoft Entertainment UBI.
Previously, the CMA had stalled the deal in April, fearing that it could give Microsoft an unfair advantage in the emerging cloud gaming industry.
With the CMA’s concerns now addressed, Microsoft is set to finalize the deal by Oct. 18. The CMA has hailed Microsoft’s streaming compromise as a “gamechanger”, noting that it is the only global competition agency to achieve such a result.
Announced in early 2022, the acquisition aims to bolster Microsoft’s growth across console, mobile, PC, and cloud gaming, setting it up to better compete with industry heavyweights like Tencent and Sony.
Microsoft and Activision had criticized the CMA’s initial blockage, which led to a review and subsequent approval of the deal. CMA Chief Executive, Sarah Cardell, emphasized that the CMA’s decisions are “free from political influence” and “unaffected by corporate lobbying”.
Despite challenges from the U.S. Federal Trade Commission, Microsoft persisted in its pursuit of the deal, which has now cleared the final regulatory obstacle.
Why It Matters: Despite challenges from the U.S. Federal Trade Commission, Microsoft persisted in its pursuit of the deal, which has now cleared the final regulatory obstacle. Earlier this year, the FTC blocked Microsoft’s attempts to acquire Activision Blizzard, fearing it would harm consumer choice and competition.
During the hearing, Microsoft CEO Satya Nadella expressed his desire to eliminate console-exclusive games, pointing to Sony’s dominance and strategy of using exclusives to drive sales.
This acquisition is part of Microsoft’s strategic move to shift the gaming industry landscape. It also comes at a time when Microsoft saw Sony’s PlayStation price hike as an opportunity to gain more fans rather than follow suit.
With inputs from Benzinga Neuro.
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