Did the UK Approve the Microsoft Activision Deal?
Yes, the UK did ultimately approve Microsoft’s acquisition of Activision Blizzard. After a lengthy and complex regulatory process, the UK’s Competition and Markets Authority (CMA) gave its final approval to the $69 billion deal on October 13, 2023, removing the last major hurdle for the acquisition to close. This decision came after an initial block of the deal in April 2023, and subsequent concessions from Microsoft regarding cloud gaming rights.
The Long and Winding Road to Approval
The journey to get the deal approved in the UK was far from smooth. The CMA initially blocked the acquisition in April 2023, raising concerns about potential harm to competition in the cloud gaming market. They argued that Microsoft’s dominance, if combined with Activision Blizzard’s vast library of popular games, could stifle competition and limit consumer choice. This decision prompted Microsoft and Activision to appeal the ruling, leading to a restructured deal aimed at addressing the CMA’s concerns.
Initial Objections and Concerns
The CMA’s initial objection stemmed from the belief that the merger could give Microsoft a stranglehold on the rapidly growing cloud gaming industry. They were specifically worried that Microsoft could potentially make Activision Blizzard games exclusive to their own cloud platform, Xbox Cloud Gaming, effectively locking out other competitors. This would potentially hurt consumers by limiting access and raising prices.
Microsoft’s Concessions and the Restructured Deal
To overcome the CMA’s concerns, Microsoft offered significant concessions. Notably, they agreed to transfer cloud gaming rights for Activision Blizzard’s games to Ubisoft. This meant that Ubisoft, a separate gaming company, would have the rights to stream these games via cloud services, preventing Microsoft from having complete control. This crucial concession ultimately swayed the CMA’s decision and allowed the restructured deal to move forward.
Final Approval and the Closing of the Deal
On October 13, 2023, the CMA formally approved the restructured transaction, signaling the end of a long and contentious regulatory battle. This final approval removed the last major roadblock for the acquisition, paving the way for Microsoft to complete the purchase. Microsoft officially closed the acquisition on the same day, bringing Activision Blizzard under its Microsoft Gaming umbrella.
The Significance of the Deal
The acquisition of Activision Blizzard is a landmark event in the gaming industry. It marks one of the largest tech transactions in history and has profound implications for the future of gaming. With Activision Blizzard’s massive portfolio of blockbuster franchises, such as Call of Duty, World of Warcraft, and Overwatch, Microsoft significantly strengthens its position in the global gaming market.
Key Takeaways
- The UK Competition and Markets Authority (CMA) initially blocked the Microsoft Activision deal.
- Concerns were raised about potential anti-competitive practices in cloud gaming.
- Microsoft made significant concessions, including transferring cloud gaming rights to Ubisoft.
- The restructured deal was approved by the CMA on October 13, 2023.
- Microsoft completed the acquisition on the same day.
- The deal is one of the largest tech acquisitions in history and will have significant implications for the gaming industry.
Frequently Asked Questions (FAQs)
1. What is Activision Blizzard?
Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. They are responsible for producing and publishing some of the world’s most popular video game franchises including Call of Duty, World of Warcraft, Overwatch, and Candy Crush.
2. Is Activision a UK company?
No, Activision Blizzard is not a UK company. It is headquartered in Santa Monica, California, and operates globally, including in the U.S., Canada, the UK, and various other regions.
3. Is Call of Duty (CoD) a British game?
No, Call of Duty is not a British game. It is developed by American studios such as Infinity Ward, Treyarch, and Sledgehammer Games, and published by Activision. While some games feature British soldiers and settings, it is not a British franchise.
4. Why did the UK initially block the Microsoft Activision deal?
The CMA blocked the deal initially due to concerns about competition in the cloud gaming sector. They believed that Microsoft, by acquiring Activision Blizzard, could become too dominant in the cloud gaming space, potentially harming consumers.
5. What were the main concerns of the CMA?
The CMA’s primary concerns revolved around the possibility of Microsoft making Activision Blizzard’s games exclusive to its Xbox Cloud Gaming service. This, they argued, could hinder competition and reduce choices for gamers.
6. What concessions did Microsoft make to get the deal approved?
The most significant concession was Microsoft agreeing to transfer cloud gaming rights for Activision Blizzard’s games to Ubisoft. This meant that Ubisoft could offer these games on their cloud gaming platforms.
7. When was the Microsoft Activision deal officially approved in the UK?
The CMA gave its final approval to the deal on October 13, 2023.
8. How much did Microsoft pay for Activision Blizzard?
Microsoft acquired Activision Blizzard for approximately $69 billion.
9. Has the deal officially closed?
Yes, Microsoft officially closed the acquisition of Activision Blizzard on October 13, 2023.
10. Why did Microsoft need UK approval?
The UK is a major market and the CMA’s approval was crucial for Microsoft’s global acquisition strategy. The CMA has jurisdiction over mergers and acquisitions that could impact competition within the UK market.
11. What does this deal mean for the future of gaming?
The acquisition of Activision Blizzard by Microsoft marks a major shift in the gaming landscape. It consolidates Microsoft’s position as a major player and provides them with a vast library of intellectual property and significant gaming resources. It’s predicted to lead to increased competition and innovation in the gaming industry.
12. Did Microsoft overpay for Activision Blizzard?
While some believe the $69 billion price tag was high, Microsoft views it as a strategic investment to facilitate category acceleration within the gaming industry.
13. Who was against the Microsoft Activision deal?
Besides the CMA’s initial block, the US Federal Trade Commission (FTC) also raised concerns about the deal’s potential harm to competition, although they were not ultimately successful in permanently stopping it.
14. Is Microsoft confident about the Activision deal?
Yes, Microsoft Xbox Chief has expressed confidence in closing the Activision deal.
15. What are the main franchises now owned by Microsoft?
With the acquisition of Activision Blizzard, Microsoft now owns major franchises such as Call of Duty, World of Warcraft, Overwatch, Candy Crush, Diablo, StarCraft, and more. This significantly expands Microsoft’s gaming portfolio and market reach.