Microsoft’s Proposed Takeover of Activision Under Investigation Again After Revised Deal
Microsoft’s attempt to acquire Activision, the video game publisher behind popular titles like Call of Duty and Overwatch, has hit another roadblock. The Competition and Markets Authority (CMA) in the UK had previously blocked the original $69 billion deal in April, citing concerns about competition in the console gaming and cloud gaming services market. Microsoft has now submitted a revised proposal in an effort to win over the CMA and proceed with the acquisition.
Under the revised plans, Microsoft has made significant changes to address the competition concerns raised by the CMA. One major change is that Microsoft will not acquire cloud rights for existing Activision PC and console games or for new games released by Activision over the next 15 years. Instead, these cloud rights will be divested to Ubisoft Entertainment SA, a rival company, prior to Microsoft’s acquisition of Activision.
The divestment of cloud rights to Ubisoft will allow gamers to access Activision’s games through different channels, including cloud-based multigame subscription services. This move aims to ensure open and effective competition in the growing cloud gaming market, driving innovation and providing gamers with more choices.
Sarah Cardell, the CEO of the CMA, emphasizes that this revised deal is not a green light for Microsoft’s acquisition. The CMA will conduct a new Phase 1 investigation to carefully and objectively assess the details of the restructured deal and its impact on competition. The regulator invites comments from interested parties on the potential effects of the new merger on competition in the UK.
Microsoft’s proposed takeover of Activision, if approved, would be the largest video game acquisition in history. The company’s restructuring of the deal demonstrates its commitment to addressing competition concerns and ensuring a fair and competitive gaming market. The outcome of the new investigation by the CMA will determine whether the revised deal ultimately gets the go-ahead.
