Microsoft Modifies Activision Blizzard Purchase After UK Regulatory Setback: Report

Microsoft Corp MSFT recently presented a revised proposal to purchase Activision Blizzard Inc ATVI after U.K. regulators quashed its original bid. 

The updated terms come in response to regulatory challenges the tech titan encountered not only in the U.K. but also in the U.S. and Europe following its announcement of a whopping $69 billion acquisition bid in early 2022.

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Despite the initial rejection, Microsoft and Activision have agreed on a revised structure for the deal. This new arrangement is under scrutiny by the U.K.'s Competition and Markets Authority (CMA), with results expected by October 18, CNBC reports.

Microsoft had already forged deals with Nvidia Corp NVDA and Sony Group Corporation SONY to crush opposition against the merger.

One of the main reasons the CMA initially opposed the acquisition was apprehensions about potential harm to the budding cloud gaming industry. 

This form of gaming, which enables users to stream games like streaming TV shows or films on Netflix Inc NFLX, is rapidly becoming a transformative force in the gaming world. 

Regulators expressed fears that Microsoft could potentially make pivotal Activision titles, such as "Call of Duty," exclusive to Microsoft-owned platforms.

In the modified proposal, Microsoft will relinquish cloud rights for existing and forthcoming Activision PC and console games for the next 15 years. Microsoft will transfer these rights to UbiSoft Entertainment Inc UBSFY before the completion of the Activision acquisition. 

Microsoft believes divesting cloud rights to Ubisoft, an independent third party, ensures a fair playing field for all cloud gaming service providers. Ubisoft can license Activision's content under varied business models, including subscription services. 

Microsoft will also be required to release game versions on OS other than its proprietary Windows. Sarah Cardell, CMA's CEO, remarked that the current proposal substantially differed from the previous but cautioned that this did not necessarily mean approval.

"We're committed to offering incredible experiences to gamers wherever they prefer to play," stated Chris Early, Senior VP of Strategic Partnerships and Business Development at Ubisoft. 

"The current deal provides gamers with even more avenues to access and enjoy some of gaming's most renowned brands."

Price Actions: ATVI shares traded higher by 1.12% at $91.74 premarket on the last check Tuesday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.