U.K. authorities give final approval for Microsoft’s $68.7B acquisition of Activision Blizzard

The United Kingdom’s Competition and Markets Authority gave final approval today for Microsoft’s $68.7 billion acquisition of Activision Blizzard.

The CMA issued a statement today that it has concluded that Microsoft’s concessions around cloud gaming are a “game changer” that will promote competition. The CMA said that the new deal for Microsoft to buy Activision without cloud gaming rights has been cleared after the CMA concluded it would preserve competitive prices and better services. The approval evidently clears the way for the deal to close on schedule without penalties for further delays.

In a statement, Activision Blizzard CEO Bobby Kotick said, “The CMA’s official approval is great news for our future with Microsoft, and we look forward to becoming part of the Xbox Team.”

In a letter to employees, Kotick also said, “Today the CMA, the regulatory authority in the UK, approved our transaction with Microsoft. We now have all regulatory approvals necessary to close and we look forward to bringing joy and connection to even more players around the world. Our board chair Brian Kelly and I are incredibly proud of all of you and your accomplishments over the last four decades. We’re excited for our next chapter together with Microsoft and the endless possibilities it creates for you and for our players.”

Microsoft first proposed the acquisition in January 2022, but it ran into headwinds as the U.S. Federal Trade Commission challenged the merger on antitrust grounds. Microsoft proceeded to address concerns by signing agreements licensing Activision Blizzard’s biggest game, Call of Duty, to rival platform makers such as Nintendo, Sony and cloud gaming services. Microsoft won the trial, though the FTC is still seeking to stop the merger in some way.

The U.K.’s CMA also held out. But in August, Microsoft made a concession that would see Ubisoft, instead of Microsoft, buy Activision’s cloud gaming rights. This new deal will put the cloud streaming rights (outside the EEA) for all of Activision’s PC and console content produced over the next 15 years in the hands of a strong and independent competitor with ambitious plans to offer new ways of accessing that content.

“As a result of this concession, the CMA agreed to look afresh at the deal and launched a new investigation in August. That investigation has completed today with the CMA clearing this narrower transaction,” the CMA said.

The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers. It will allow Ubisoft to offer Activision’s content under any business model, including through multigame subscription services. It will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.

Sarah Cardell, CEO of the CMA, said in a statement, “The CMA is resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses. We take our decisions free from political influence and we won’t be swayed by corporate lobbying. ”