Microsoft's acquisition of Activision Blizzard has been approved by the UK

According to the Zhongtong Finance APP, the UK's highest competition regulatory agency approved Microsoft's (MSFT.US) proposal to acquire game company Activision Blizzard (ATVI.US) for $69 billion on Friday, clearing the last major obstacle to the completion of the transaction.

On October 13th local time, the Competition and Markets Authority (CMA) of the UK issued a statement stating that it has approved Microsoft's acquisition of Activision Blizzard's new agreement, but it does not include the copyright of cloud gaming. The CMA stated that Microsoft made concessions in August this year, and Ubisoft will purchase the cloud gaming copyright of Activision Blizzard.

The CMA stated in the statement: "With the rise of the cloud gaming market, this new agreement will prevent Microsoft from locking the competition in the cloud gaming field, and retain competitive prices and services for UK cloud gaming customers."

"This will allow Ubisoft to provide Activision's content in any business model, including through multi-game subscription services. This will also help ensure that cloud gaming providers can use non-Windows operating systems for Activision's content, thereby reducing costs and improving efficiency."

This marks a significant change in the attitude of the CMA. The CMA was the most staunch critic of this acquisition, and earlier this year, it actually blocked the deal due to concerns that the acquisition would hinder competition in the emerging cloud gaming market.

Microsoft first proposed the acquisition of Activision in January 2022, but has since faced regulatory challenges in the United States, Europe, and the UK.

In July of this year, the CMA stated that it would consider restructuring the acquisition of Microsoft to alleviate its concerns. Microsoft made a series of concessions, including transferring the cloud copyright of Activision games to French game publisher Ubisoft Entertainment.

"Due to this concession, the CMA agreed to re-examine this transaction and launched a new investigation in August. The investigation has ended today, and the CMA has cleared this relatively small transaction."

A 180-degree turn in UK regulation

Global regulatory agencies are concerned that this acquisition will reduce competition in the gaming market, especially in cloud gaming. These officials said that Microsoft can also include Activision's key games such as "Call of Duty" on Xbox and other Microsoft platforms.

Cloud gaming is seen as the next frontier of the industry, offering subscription services that allow people to play games like watching movies or shows on Netflix. It can even eliminate the need for expensive game consoles, and users can play games on PCs, mobile phones, and TVs.

Specifically, when the UK regulatory agency blocked this acquisition in April this year, it stated that allowing the transaction to continue would allow Microsoft to dominate the emerging cloud gaming market.

In May of this year, after Microsoft made concessions to the European Union, the EU authorities were the first major regulatory agency to approve the transaction.

At that time, the CMA stated that it insisted on its initial decision to block the transaction because the compromises submitted to the European Union would allow Microsoft to "set terms and conditions for this market in the next decade."

Meanwhile, in the United States, the Federal Trade Commission (FTC) is engaged in a legal battle with Microsoft, trying to get Microsoft to abandon the acquisition of Activision. However, in July of this year, a judge blocked the FTC's attempt to do so, clearing the way for the transaction to continue in the United States.Just a few hours later, CMA announced that it is "prepared to consider any proposed restructuring transaction put forward by Microsoft" and alleviated regulatory concerns.

In August of this year, Microsoft made concessions to CMA, marking its second attempt to gain approval for the deal.

According to the restructured transaction, Microsoft will not gain cloud usage rights for Activision's existing PC and console games, nor will it gain cloud usage rights for new games released by Activision in the next 15 years. These rights will be transferred to Ubisoft Entertainment before Microsoft acquires Activision, according to CMA.

CMA is the last major regulatory body to prevent the acquisition of Activision.

Meanwhile, Microsoft has been striving to stay ahead of the issue. In February of this year, Microsoft signed an agreement to bring Xbox games to Nvidia's cloud gaming service and reached a 10-year agreement to launch "Call of Duty" on the same day as Xbox, with "identical features and content." In July of this year, Microsoft also signed an agreement with its biggest competitor, Sony, to bring "Call of Duty" to Sony's PlayStation console.