The UK’s Competition and Markets Authority (CMA) has preliminarily approved of the Microsoft / Activision Blizzard merger, but Activision’s Cloud gaming rights will be sold to Ubisoft.
Earlier this year, the CMA had blocked Microsoft from acquiring Activision due to fears that it would negatively impact competition in the UK’s cloud gaming sector.
However, Microsoft later proposed a restructured transaction, which the CMA is reviewing. In the new deal, Microsoft won’t acquire the cloud gaming rights held by Activision. Instead, the rights will be sold to an independent third party, Ubisoft Entertainment SA, before the deal’s completion.
The deal ensures that Ubisoft will be the primary supplier of content to cloud gaming services, taking on the role that Activision would have acquired as an independent entity.
Unlike the original proposal, Microsoft won’t have control over cloud gaming rights for Activision’s content, which means Microsoft can’t limit access to Activision’s primary content to its cloud gaming service or withhold these games from competitors.
The CMA still has some residual concerns about the sale of Activision’s cloud streaming rights to Ubisoft. To address those, Microsoft has proposed remedies to ensure the terms of sale of Activision’s right to Ubisoft can be enforced by the CMA.
Activision Blizzard CEO Bobby Kotick shared an update with employees regarding the merger’s progress, informing his team that the CMA has issued a preliminary approval of the merger. Bobby stressed out the importance of this “crucial step” towards finalizing the merger.
(Source)
Team,
I want to share an important update on our planned merger with Microsoft.
Today the UK regulatory authority, the CMA, issued a preliminary approval of our merger with Microsoft based on the solutions Microsoft presented in connection with its new merger application. This approval is critical to completing our merger.
The next step is for the CMA to gather third-party feedback, after which the CMA will reach a final decision.
As I said when we announced the deal, this transaction will help us accelerate our ambitions for the future of gaming and enable us to better serve our players. Microsoft recognizes the commitment to excellence and creative independence that has served us well for the last 30 years. I am confident that their resources, technology, and tools will provide us even greater opportunities to create even better games.
This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators. I remain optimistic as we continue the journey toward completion and am very grateful to each of you for your dedication and focus throughout this process.
As the regulators continue their process, I will keep you updated on our progress towards our expected closing.
With gratitude,
Bobby
Sources: UK Government Website, Activision Blizzard Newsroom
