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CMA Issues Preliminary Approval of Restructured Activision Blizzard Sale to Microsoft
Blizzard
Geposted
22.09.2023 um 11:50
von
Archimtiros
The United Kingdom's Competition and Markets Authority has issued a
preliminary approval of the merger between Microsoft and Activision Blizzard
, as they move into a consultation period and prepare to make a final decision.
The CMA previously
moved to block the deal last April
, citing concerns that it would damage competition in the cloud gaming market, leading to less innovation and choice for UK gamers. In response, Microsoft restructured their proposal to
divest cloud gaming rights of Activision Blizzard games to Ubisoft
instead, who as an independent entity from Microsoft will replicate the role Activision would have played in the market as a standalone company.
Competition and Markets Authority
The CMA considers that the restructured deal makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year.
In particular, the sale of Activision’s cloud streaming rights to Ubisoft will prevent this important content – including games such as Call of Duty, Overwatch, and World of Warcraft – from coming under the control of Microsoft in relation to cloud gaming. The CMA originally found that Microsoft already has a strong position in cloud gaming services and could have used its control over Activision content to stifle competition and reinforce this position. The new deal instead results in the cloud streaming rights for Activision’s games being transferred to an independent player, Ubisoft, maintaining open competition as the market for cloud gaming develops over the coming years.
This means that Microsoft will no longer be in a position to limit access to their own cloud gaming services, or potentially withhold Activision games from their rivals - Ubisoft will be free to offer Activision games directly to consumers and to all cloud gaming service providers however it chooses, whether through outright sales, multigame subscription services, or any other model they see fit, thereby maintaining open competition within the cloud gaming market and laying the majority of the CMA's concerns to rest.
The deal is not yet completely approved though, as the CMA will be consulting on residual concerns that Ubisoft's control of cloud gaming rights "could be circumvented, terminated, or not enforced," which Microsoft has offered additional remedies to address. The consultation period is set to end on October 6th, after which the CMA will render a final decision ahead of the merger's October 18 deadline.
In response to the news, Microsoft President Brad Smith
shared his enthusiasm
over Twitter, while
Activision Blizzard CEO Bobby Kotick released a message
to employees.
Bobby Kotick
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
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