For nearly two year, the Xbox firm over at Microsoft has been fighting restlessly to clean up on the Activision Blizzard deal in courts across the globe. Earlier this summer, it was decided that the $70 billion deal is in favor of Microsoft after battling against the FTC in court. However, Microsoft still has another opponent across the Atlantic with the U.K. Competition and Markets Authority (CMA). During that, the deadline was extended for further evaluation on the subject.
Since then, more has developed to shed better light on the Xbox deal. In that, Microsoft would be handing the reigns for cloud streaming to Ubisoft as part of the arrangement. The partnership also establishes Activision Blizzard titles are to come to Ubisoft+ as well. And now looking as the final days are coming for the acquisition, it appears that the end result might be in a good position for Microsoft.
Ahead of the deadline for the Activision Blizzard deal, the CMA has released a statement on the current viewpoint for Microsoft. In the press release, the regulator tells Microsoft has applied solutions to original contradictions that the CMA found issue with – namely Ubisoft handling the cloud side of the deal.
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.
While the restructured deal is materially different to the previous transaction and substantially addresses most concerns, the CMA has limited residual concerns that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced.
To address these concerns, Microsoft has offered remedies to ensure that the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA. The CMA has provisionally concluded that this additional protection should resolve those residual concerns. The CMA has now opened a consultation, until 6 October, on Microsoft’s proposed remedies.
“The CMA’s position has been consistent throughout – this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved. In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns,” CMA CEO Sarah Cardell offers in a statement.
“It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”
What has you most surprised about this turnaround for the Activision Blizzard deal?
