UK Approval Expected for Microsoft's Fresh Agreement Involving Call of Duty

The UK's competition watchdog has indicated that Microsoft's revised bid to acquire Activision Blizzard, the maker of Call of Duty, has made progress towards potential approval.

The Competition Markets Authority (CMA) stated that the updated offer seemed to address the concerns it had previously raised. In the new proposal, Microsoft has agreed not to acquire the cloud gaming rights held by Activision Blizzard.

The original deal, valued at $69 billion (£59 billion), had been blocked by UK regulators earlier. The CMA's primary concern had been that the acquisition could negatively impact competition in the UK's cloud gaming sector.

In response, Microsoft presented a restructured deal for review last month. Under this revised offer, Microsoft would transfer the rights to stream Activision games via the cloud to the French video game publisher Ubisoft for a period of 15 years. This arrangement would ensure that the cloud streaming of popular games like Call of Duty, Overwatch, and World of Warcraft would not fall under Microsoft's control.

Sarah Cardell, the CEO of the CMA, stated in a Friday announcement, "The CMA's position has been consistent throughout - this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved." A consultation period will be initiated before a final decision on the deal is made.

This recent development is likely to come as a relief to Microsoft and Activision, as the deal has faced significant hurdles and controversy since it was first announced in January of the previous year. While it gained approval from European Union regulators in May, the U.S. competition watchdog's attempt to halt the acquisition was rejected by an appeals court.

Sony also initially objected to the deal, expressing concerns that Microsoft might restrict access to major games on its own PlayStation platform. The CMA noted that with additional safeguards, gamers would still have various ways to access Activision's games, including through cloud-based multi-game subscription services.

Although the CMA maintained "limited residual concerns," the revised deal ensures that the cloud distribution of these important games remains in the hands of an independent supplier, Ubisoft, rather than under Microsoft's control. Ms. Cardell emphasized that this restructuring was not a minor adjustment but a fundamental change to the deal.

This agreement marks the conclusion of the CMA's first significant test case since it acquired additional powers post-Brexit, shedding light on how competition rules function in the UK.