The UK competition watchdog has cleared Microsoft’s $69 billion deal to buy ‘Call of Duty’ developer Activision Blizzard. According to the BBC, the Competition and Markets Authority (CMA) said that Microsoft – the maker of the Xbox gaming console – could go ahead with the takeover after agreeing to buy Activision without cloud gaming rights. Now, this deal marks the culmination of a near-two-year fight to secure the biggest deal in gaming history.

Microsoft announced the biggest gaming deal in early 2022, but the $69 billion acquisition was blocked in April by Britain’s competition regulator, the BBC reported. The CMA was concerned that the US computing giant would gain too much control of the new cloud gaming market. However, changes in the deal have since been made. 

Last month the UK watchdog said a revised deal that included selling cloud gaming rights outside Europe to Activision Blizzard’s French rival Ubisoft had addressed its concern, indicating the tie-up would be approved. 

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Now, the new deal, according to The Independent, will stop Microsoft from having a “stronghold” over the UK cloud gaming market, the CMA said. It added that it would preserve competitive prices for gamers and make sure consumers get more choices. 

However, the CMA also criticised Microsoft for “dragging out” proceedings during its investigation into the merger. CMA chief executive, Sarah Cardell, said, “Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA.”

“Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money,” Ms Cardell added. 

The president of Microsoft, Brad Smith said that the group is “grateful” for the decision to approve the acquisition which he believes will “benefit players and the gaming industry worldwide”. 

File picture of Activision’s Call of Duty shown on a smartphone near a photograph of the Microsoft logo
| Photo Credit: AP

Microsoft’s purchase of video game maker Activision Blizzard won final approval Friday from Britain’s competition watchdog, reversing its earlier decision to block the $69 billion deal and removing a last obstacle for one of the largest tech transactions in history.

The Competition and Markets Authority’s blessing was expected after it gave preliminary approval last month to a revamped Microsoft proposal meant to address concerns that the deal would harm competition and hurt gamers.

It signals certain victory in the Xbox maker’s quest to acquire Activision, maker of the popular Call of Duty game franchise.

The companies had agreed to extend an original mid-July deadline to October 18 to overcome the British regulator’s objections. The approval also helps Microsoft avoid paying Activision a $4.5 billion penalty if the deal doesn’t close.

“The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers,” the watchdog said.

Microsoft President Brad Smith said the company was grateful for the “thorough review and decision.”

“We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide,” he said.

Activision CEO Bobby Kotick also welcomed the news: “We look forward to becoming part of the Xbox Team.”

Since the deal was announced in January 2022, Microsoft has secured approvals from antitrust authorities covering more than 40 countries. Crucially, it got a thumbs-up from the 27-nation European Union after agreeing to allow users and cloud gaming platforms to stream its titles without paying royalties for 10 years.

But the deal faced resistance from British and American regulators who worried it would stifle competition in the video game industry. Top rival Sony also feared it would limit PlayStation gamers’ access to Call of Duty, Activision’s long-running military shooter series.

The U.S. Federal Trade Commission lost a court bid to pause the deal so that its in-house judge could review it. The FTC hasn’t given up, appealing the decision and last month filing notice of its plan to resume that trial. That signals the U.S. regulator’s intention to unwind the deal even after it closes.

In the meantime, the U.K. regulator was the last major obstacle to the transaction going through. The CMA’s approval came after Microsoft updated its offer in August.

Under the restructured deal, Microsoft will sell off cloud streaming rights outside of the EU and three other European countries for all current and new Activision games released over the next 15 years to French game studio Ubisoft Entertainment.

British regulators had initially blocked the transaction in April over concerns Microsoft could withhold Activision titles from the emerging cloud gaming market, where players can avoid buying pricey consoles and stream games to their tablets or phones.

Then, in an unprecedented move, the U.K. watchdog delayed its final decision, saying it needed to reconsider and agreeing with Microsoft to put appeal proceedings on hold.

One factor was the EU’s approval, granted after Microsoft promised to automatically license Activision titles royalty-free to cloud gaming platforms. Another “material change of circumstance” that the watchdog said it needed to consider, according to court documents, was an agreement Microsoft signed with Sony to make Call of Duty available on PlayStation for at least 10 years.