Microsoft has submitted a revised proposal for the acquisition of Activision Blizzard after its initial bid was rejected by U.K. regulators. The $69 billion takeover attempt, initially presented in January 2022, encountered regulatory hurdles in the U.S., Europe, and the U.K. The U.K.’s Competition and Markets Authority (CMA) confirmed the rejection of the original deal but revealed that Microsoft and Activision have agreed on a restructured agreement. The CMA will investigate this new arrangement with a decision deadline set for October 18.
Microsoft’s President Brad Smith expressed optimism that the review could be concluded before this date. In the restructured deal, Microsoft will not acquire cloud rights for existing and new Activision PC and console games for the next 15 years. Instead, these rights will be transferred to French game publisher Ubisoft Entertainment prior to Microsoft’s acquisition of Activision.
The CMA has been particularly critical of the takeover, citing concerns about competition in the emerging cloud gaming market. Cloud gaming is seen as a transformative trend that enables game streaming through subscription services, potentially eliminating the need for expensive consoles. European regulators cleared the deal in May after Microsoft offered concessions such as granting royalty-free licenses for cloud gaming platforms to stream Activision games if purchased by consumers. However, the CMA rejected these measures, fearing Microsoft would dominate the market’s terms for the next decade.
In the U.S., the Federal Trade Commission initially contested the takeover but was blocked by a judge in July, allowing the deal to proceed. Subsequently, the CMA signaled its readiness to consider Microsoft’s restructuring proposals to address concerns. The new proposal involves divesting cloud streaming rights to Ubisoft, enabling the latter to license Activision’s content to various cloud gaming providers, including Microsoft. The deal also mandates Microsoft to release game versions on non-Windows operating systems. While Microsoft sees this as an opportunity to expand player experiences, the CMA remains cautious, emphasizing that this does not indicate approval of the deal. Compensation to Microsoft for the divestment will occur through a one-off payment and a market-based wholesale pricing mechanism, promoting broader accessibility to gaming content.
Read More: https://ciolook.com/