Breaking the Regulatory Deadlock
"Call of Duty" maker Activision Blizzard will sell its streaming rights to Ubisoft Entertainment to win approval from Britain's anti-trust regulator for its massive $69 billion sale to Microsoft. This decision comes after the initial deal was blocked over concerns about Microsoft's potential dominance in the cloud gaming market.
Microsoft's Biggest Deal Stumbles
Announced as the biggest gaming deal ever in early 2022, the acquisition was halted by Britain's competition regulator, fearing that Microsoft would monopolize the emerging cloud gaming industry. After much debate, the Competition and Markets Authority (CMA) maintained its refusal, necessitating new terms from Microsoft.
Restructured Deal Details
Under the updated agreement, Microsoft will lose exclusive control over the release of key Activision games on Xbox Cloud Gaming or licensing terms for rivals. Ubisoft, a French gaming company, will gain cloud streaming rights for Activision's existing and future games for the next 15 years, with exceptions in Europe.
Reactions from the Market and EU Antitrust
The restructured deal prompted a small rise in Activision and Microsoft's shares and provoked a reexamination from EU antitrust regulators. Legal experts anticipate the revised deal will proceed, albeit with possible obstacles.
Anticipated Review Timeline
Microsoft expects the new proposal to be reviewed by the CMA by Oct. 18. The regulatory body has outlined a two-phase examination process, with the possibility of extending the deal deadline by three months if necessary.
Ensuring Effective Competition
CMA Chief Executive Sarah Cardell affirmed the regulator's commitment to maintaining open competition in the cloud gaming market. The CMA's firm stance shows its robust approach to tech deals since Britain's EU departure, though some argue it introduces uncertainty to the regulatory landscape.
Global Regulatory Perspectives
While the Federal Trade Commission in the U.S. opposed the deal, the European Union approved it, adding complexity to the global regulatory environment. The CMA, having previously blocked the deal, was forced to reconsider after changes and commitments by Microsoft.
Ubisoft's Gains and Market Response
Ubisoft will acquire the streaming rights through a one-time payment and a market-based pricing mechanism. The company's shares in Paris soared nearly 10% upon the announcement, reflecting positive market sentiment towards this strategic acquisition.
