Microsoft Submits Restructured Agreement for Activision Blizzard Acquisition amid Regulatory Challenges

Microsoft has submitted a revised agreement to the UK Competition and Markets Authority (CMA) for the acquisition of Activision Blizzard after the initial proposal faced rejection.

In January 2022, Microsoft put forth a proposal to acquire Activision Blizzard for $69 billion. However, this announcement triggered regulatory moves from authorities in the United States, the United Kingdom, and Europe, leading to a more complex approval process. Particularly, the UK Competition and Markets Authority declined Microsoft’s initial takeover proposal, expressing concerns about potential consequences for competitors.

In response to the initial rejection, Microsoft has introduced a new proposal that both companies have mutually accepted. The terms of this agreement have been adjusted to align with the stipulations of the United Kingdom regulatory body.

The CMA is now set to initiate an inquiry into the revised agreement, with the final decision to accept or reject the proposal slated for October 18. However, Brad Smith, Microsoft’s Vice Chairman and President, anticipates the possibility of concluding the process prior to the 90-day extension. Furthermore, he voiced his confidence in the positive impact that the new proposal could have on gamers and the gaming industry, stating:

“We are convinced that this development holds promise for players, the evolution of the cloud game streaming market, and the overall expansion of our industry. As we continue to navigate the review process with the CMA, our commitment remains steadfast in delivering the remarkable advantages of this acquisition to players, developers, and the industry at large. Today’s development signifies a significant stride towards delivering the joy of gaming to enthusiasts worldwide.”

Some Amendments Made in the New Microsoft-Activision Blizzard Agreement

The revised agreement grants Microsoft a more limited set of privileges. Among the changes is the transfer of cloud streaming rights for all existing and upcoming Activision Blizzard games over the next 15 years to Ubisoft Entertainment. This move enables Ubisoft to explore diverse business models and pricing strategies for its games. In return for these rights, Ubisoft will compensate Microsoft with a one-time payment and other benefits over time.

With this restructured agreement, Microsoft will not have the exclusive right to release Activision Blizzard games on its own Xbox cloud gaming service. Consequently, these games will not be confined to the Microsoft ecosystem and can also be accessible on other gaming platforms.

Furthermore, Microsoft won’t have sole control over how other gaming services can use Activision Blizzard games. This way, the Redmond tech giant won’t have the power to dictate the terms and conditions for licensing the games to its competitors.

The new agreement is intended to promote fair competition and make sure that Microsoft does not have the power to restrict the availability of these games to its own service or control other gaming platforms using its games.