The ongoing saga of Microsoft (NASDAQ:MSFT)'s acquisition of Activision, the maker of Call of Duty, has taken a positive turn this Friday with the UK's Competition and Markets Authority (CMA) provisionally approving the deal. This development comes in the wake of Ubisoft’s involvement in acquiring Activision’s cloud gaming rights, a move that seems to have allayed the CMA’s initial concerns about cloud gaming competition.
The CMA had previously blocked the sale due to apprehensions about Microsoft gaining too much control over cloud gaming. However, Microsoft's decision to sell Activision's cloud gaming rights to Ubisoft appears to have mitigated these fears. "While the CMA has identified limited residual concerns with the new deal, Microsoft has put forward remedies which the CMA has provisionally concluded should address these issues," reads a statement on the CMA's website.
This provisional approval is not yet final as the CMA must now consult on the remedies before making a final decision. Nevertheless, it is seen as a significant win for Xbox, making their acquisition of Activision more probable by the October 18 deadline. Brad Smith, Microsoft Vice Chair and President, expressed optimism about this development on Twitter: “We are encouraged by this positive development in the CMA's review process.”
Activision CEO Bobby Kotick also shared his enthusiasm for the developments in a company-wide email: “As I said when we announced the deal, this transaction will help us accelerate our ambitions for the future of gaming and enable us to better serve our players. Microsoft recognises the commitment to excellence and creative independence that has served us well for the last 30 years."
The new agreement stipulates that Ubisoft will retain cloud streaming rights for all Activision Blizzard (NASDAQ:ATVI) games now and in the next fifteen years. Gamers who wish to stream Activision games through the cloud will need to use Ubisoft's services, and Microsoft will have to negotiate terms with Ubisoft to add cloud streaming of these games to their services.
The CMA has scheduled a consultation until October 6, 2023, to address any remaining concerns about the deal. This timeline aligns with Microsoft's deadline to close the deal by October 18, 2023. This provisional approval marks a significant milestone in a process that began with Microsoft's announcement of intent to acquire Activision in January 2022.
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