Microsoft-Activision Blizzard takeover approved by UK regulator CMA

Britain’s top competition watchdog on Friday gave the green light to Microsoft’s proposed $69 billion takeover of gaming firm Activision Blizzard, removing the last major hurdle for the deal to close.

The Competition and Markets Authority said it had cleared the deal for Microsoft to buy Activision but without cloud gaming rights.

“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,” the regulator said in a statement Friday.

The CMA was the final regulator holding up the deal. Microsoft should now be able to close the acquisition.

The decision marks a major U-turn from the CMA, the staunchest critic of the takeover, which effectively blocked the deal earlier this year over concerns that the acquisition would hamper competition in the nascent cloud gaming market.

Microsoft first proposed to acquire Activision in January 2022, but has since faced regulatory challenges in the U.S., Europe and the U.K.

In July, the CMA said it would consider a restructured acquisition from Microsoft to allay its concerns. Microsoft offered a spate of concessions, which centered around divesting the cloud rights of Activision games to French game publisher Ubisoft Entertainment.

“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,” the CMA said.

Regulators globally were concerned that the takeover would reduce competition in the gaming market, in particular around cloud gaming. Microsoft could also take key Activision games like Call of Duty and make them exclusive to Xbox and other Microsoft platforms, the officials argued.

Cloud gaming is seen as the next industry frontier, offering subscription services that allow people to stream games just as they would movies or shows on Netflix. It could even remove the need for expensive consoles, with users playing the games on PCs, mobile and TVs instead.

Specifically, the U.K. regulator argued when it blocked the takeover in April that allowing the deal to go ahead would give Microsoft a strong position in the nascent cloud gaming market.

Authorities in the European Union were the first major regulator to clear the deal in May, after Microsoft offered concessions to the EU.

At the time, the CMA said it stood by its initial decision to block the deal because the compromises presented to the EU would allow Microsoft to “set the terms and conditions for this market for the next ten years.”

Meanwhile, in the U.S., the Federal Trade Commission was fighting a legal battle with Microsoft in an effort…