Microsoft restructures Activision Blizzard acquisition bid

Microsoft has made a new bid to buy Call of Duty maker Activision Blizzard, after the US$69bn deal was blocked by the UK regulator

Microsoft has restructured its US$69bn deal to buy Activision Blizzard, maker of Call of Duty and World of Warcraft, in a deal which would be the largest in gaming history.

Microsoft’s proposed acquisition of Activision Blizzard was first announced in January of last year, and would have seen the latter become a division of Microsoft Gaming.

But in April, the UK’s Competition and Markets Authority (CMA) blocked the deal, suggesting it would “alter the future of the fast-growing cloud gaming market”, resulting in “reduced innovation and less choice for UK gamers” over the coming years. 

Microsoft and Activision Blizzard deal restructured

In its original ruling, the CMA said Microsoft’s solutions had failed to effectively address concerns around cloud gaming, which is growing rapidly in the UK and is forecast to be worth almost US$14bn globally by 2026. 

“To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the CMA, we are restructuring the transaction to acquire a narrower set of rights,” explained Brad Smith, Vice Chair & President at Microsoft. “This includes executing an agreement effective at the closing of our merger that transfers the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher. The rights will be in perpetuity.”

Under the restructured transaction, Microsoft said it will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service – Xbox Cloud Gaming – or to exclusively control the licensing terms of Activision Blizzard games for rival services.

“Since our initial announcement with Activision Blizzard in January last year, we have endeavored to earn regulatory approval for the transaction, addressing concerns when raised, including by entering into binding legal commitments to bring Call of Duty to rival consoles and Activision Blizzard games to rival cloud streaming platforms. As a result, the transaction is now in a position to move forward in more than 40 countries,” Smith added.

“We believe that this development is positive for players, the progression of the cloud game streaming market, and for the growth of our industry. And, as we continue to navigate the review process with the CMA, we remain as committed as ever to bringing the incredible benefits of the acquisition to players, developers, and the industry.”

Sarah Cardell, CEO of the CMA, told the BBC that Microsoft's new offer was “substantially different from what was put on the table previously”" and that it would ‘carefully and objectively’ assess the new deal.

“Our goal has not changed - any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”

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