Microsoft is finally clear to complete its purchase of gaming giant Activision after the Competition and Markets Authority (CMA) said its concerns over the deal had been alleviated.
The UK watchdog initially blocked the acquisition over worries it would “alter the future of the fast-growing cloud gaming market”, leading to reduced innovation and fewer choices for UK gamers.
In response, the company reworked the agreement, offering to sell Activision’s non-European streaming rights to Ubisoft Entertainment as a way to assuage the regulator’s concerns. Microsoft said its new proposal was a “substantially different transaction” to the one proposed in 2022.
As a result of this concession, the CMA agreed to look afresh at the deal and launched a new investigation in August, which has now been concluded. It said the agreement will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content.
“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,” said Sarah Cardell, CMA chief executive.
“We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that.
“With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market. As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome.”
The global cloud gaming market size was valued at just $3.37bn in 2022 versus an estimated $217.06bn for gaming as a whole. However, the market is currently projected to grow to $84.97bn by 2030.
Martin Coleman, chair of the panel that reviewed the original Microsoft deal, said: “Cloud gaming is an important new way for gamers to access games and this deal could have seriously undermined its potential development.
“On that ourselves, the European Commission and the US Federal Trade Commission are in full agreement. Where we differ is in how we solve that problem. We rejected a solution put to us by the parties that would have left Microsoft with too much control.
“We now have a new transaction in which the cloud distribution of Activision games, old and new, is taken away from Microsoft and put into the hands of Ubisoft, an independent party that is committed to widening access to the games. That’s better for competition, better for consumers and better for economic growth.”
