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News The UK regulator CMA has provisionally approved Microsoft's acquisition of Activision Blizzard

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www.videogameschronicle.com

The UK regulator has provisionally approved Microsoft’s Activision acquisition | VGC

Selling cloud rights to Ubisoft "opens the door to the deal being cleared"
www.videogameschronicle.com www.videogameschronicle.com
UK regulator the Competition and Markets Authority (CMA) has provisionally agreed to allow Microsoft’s proposed acquisition of Activision Blizzard.

The CMA has remained the last major roadblock to the deal closing, and initially blocked the acquisition in April due to concerns about its impact on the nascent cloud gaming market.

Microsoft attempted to restructure its proposed acquisition by agreeing to sell cloud streaming rights to Ubisoft, leading the CMA to launch a new merger inquiry.

This move has now seemingly been enough to satisfy the CMA, which has posted its provisional decision today.
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“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,” the statement reads.

It adds: “While the restructured deal is materially different to the previous transaction and substantially addresses most concerns, the CMA has limited residual concerns that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced.

“To address these concerns, Microsoft has offered remedies to ensure that the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA. The CMA has provisionally concluded that this additional protection should resolve those residual concerns.”

The CMA has now opened a consultation until October 6, after which time it will make a final decision. Unless any major objections shed new light on the situation, it should now be expected that the CMA will approve the deal.
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Well we knew that was where things were headed, anyway. CMA wouldn’t have risked getting their case dissected at CAT.
 
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I love how the CMA is still trying to be snippy "if you could have given us this the first time we'd have avoided this drama" when their original report said "only a full sale of most of abk would be appropriate" 🙊
 
CMA saw the leaked emails and knew it was either Activision now or Nintendo 20 years later and as Mario fans, did what needed to be done (/s)
 
It's finally over. Xbox has been my go to "high end" console and it feels like ever since this whole saga started Microsoft has heavily pumped the breaks on Xbox hype due to whatever song and dance they have been playing for regulators. I'm excited to see what happens with the platform going forward.

I don't care about them owning ABK; I'm just glad it's over and Xbox can move on.
 
In retrospect, it seemed inevitable once the EU approved. At least it’s all just about finished now.
 
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But you know, i'm gonna miss the info leak opportunities this whole shitshow brought.
 
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COD to be hosted at the Switch REDACTED reveal showcase, Bay Bay!

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(disclaimer: I don't even like CoD lol)
 
What an absolute palava this whole thing has been. Definitely a slight phyrric victory for Microsoft given all the concessions they had to make, and I absolutely can see them slowing up on acquisitions now while they work to make this whole debacle worth their while.

And good grief at that final parting shot from the CMA. Next time, don't do a Leroy Jenkins and charge in ahead while everyone else watches you with blank expressions on their faces.
 
Galgavias said:
What an absolute palava this whole thing has been. Definitely a slight phyrric victory for Microsoft given all the concessions they had to make, and I absolutely can see them slowing up on acquisitions now while they work to make this whole debacle worth their while.

And good grief at that final parting shot from the CMA. Next time, don't do a Leroy Jenkins and charge in ahead while everyone else watches you with blank expressions on their faces.
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I think the only thing Microsoft really had to give up were the cloud rights to Activision's games to Ubisoft, and a promise to support other cloud services and contracted partners with Activision games for the next 10 years. In the end, that's all fairly small potatoes for what the real prize was: a massive value-add for Game Pass, a strong mobile foothold, and a ton of valuable, established IP.

Ubisoft getting a windfall out of nowhere might be the weirdest turn this whole thing took.
 
Galgavias said:
What an absolute palava this whole thing has been. Definitely a slight phyrric victory for Microsoft given all the concessions they had to make, and I absolutely can see them slowing up on acquisitions now while they work to make this whole debacle worth their while.

And good grief at that final parting shot from the CMA. Next time, don't do a Leroy Jenkins and charge in ahead while everyone else watches you with blank expressions on their faces.
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Microsoft robbed Fort Knox and their only concession of note was that they had to let other people use the building for a decade first before they could own it. Microsoft still ran off with all the gold which was the real value.
 
WestEgg said:
the only thing Microsoft really had to give up were the cloud rights to Activision's games to Ubisoft, and a promise to support other cloud services and contracted partners with Activision games for the next 10 years
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Yeah, the biggest losers are the people who need to get the paperwork in order to facilitate MS and Ubi’s weird arrangement.
 
meatbag said:
Yeah, the biggest losers are the people who need to get the paperwork in order to facilitate MS and Ubi’s weird arrangement.
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And MS if Ubisoft starts to leak more MS info due to that connection they now have! ;D
 
hahaha I just remembered the nintendo cod deal

"to make this deal work we pledge to put games on this stupid tablet that shouldn't even exist and won't exist when we buy the stupid fuckers in ten years"

amazing
 
WestEgg said:
I think the only thing Microsoft really had to give up were the cloud rights to Activision's games to Ubisoft, and a promise to support other cloud services and contracted partners with Activision games for the next 10 years. In the end, that's all fairly small potatoes for what the real prize was: a massive value-add for Game Pass, a strong mobile foothold, and a ton of valuable, established IP.

Ubisoft getting a windfall out of nowhere might be the weirdest turn this whole thing took.
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I'd also count agreeing to put COD and other Acti-Blizz franchises on non-Microsoft hardware as a concession, because in their ideal world they would have made them all Xbox exclusive like Bethesda. But I think this was a concession they were going to have to make somewhere along the line and they pre-empted it with the Nintendo getting COD news.

The other issue is this has been a very costly acqusition in terms of time spent, legal fees and opportunity cost. Each month this was drawn out was a month tangling up their resources and keeping their general strategy for gaming in a limbo state. Yeah Microsoft have cash to burn and lawyers on speeddiall, but there was no way they anticipated this process being this painful and it's going to have had an impact on Microsoft's gaming strategy.

Don't get me wrong, they'll still be cock-a-hoop in Microsoft this morning, but this has been a bruising fight for them and they'll have to take the time to heal up and regroup before they try something like this again. In that timeframe they'll have to the equally onerous task to incorporating all the Acti-Blizz teams and assets into their own. That's going to take a while.

Honestly, I think the time we really start to see the fruits of this acquisition will be around the same time the next Xbox is scheduled to release. That should probably be their long term aim now, to get all their ducks in a row in time for the next console to launch with a bang, like Nintendo did with the Switch.
 
Galgavias said:
I'd also count agreeing to put COD and other Acti-Blizz franchises on non-Microsoft hardware as a concession, because in their ideal world they would have made them all Xbox exclusive like Bethesda. But I think this was a concession they were going to have to make somewhere along the line and they pre-empted it with the Nintendo getting COD news.

The other issue is this has been a very costly acqusition in terms of time spent, legal fees and opportunity cost. Each month this was drawn out was a month tangling up their resources and keeping their general strategy for gaming in a limbo state. Yeah Microsoft have cash to burn and lawyers on speeddiall, but there was no way they anticipated this process being this painful and it's going to have had an impact on Microsoft's gaming strategy.

Don't get me wrong, they'll still be cock-a-hoop in Microsoft this morning, but this has been a bruising fight for them and they'll have to take the time to heal up and regroup before they try something like this again. In that timeframe they'll have to the equally onerous task to incorporating all the Acti-Blizz teams and assets into their own. That's going to take a while.

Honestly, I think the time we really start to see the fruits of this acquisition will be around the same time the next Xbox is scheduled to release. That should probably be their long term aim now, to get all their ducks in a row in time for the next console to launch with a bang, like Nintendo did with the Switch.
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Microsoft just made the biggest acquisition in tech history. Their next dozen acquisitions combined won't even come close to the size of this deal, and none of them will even get a passing glance by regulatory bodies.
 
I'm still not even sure why Microsoft is doing this.

They keep saying that it's because they want to open their own mobile storefront but like... New storefronts have been a huge failure and Apple's customers in general seem especially unwilling to go outside of the Apple marketplace (assuming Apple is even forced to allow this by the government).
 
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BassForever said:
Microsoft just made the biggest acquisition in tech history. Their next dozen acquisitions combined won't even come close to the size of this deal, and none of them will even get a passing glance by regulatory bodies.
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And that's why I think they'll ease up. They're spending an insane amount of money here, and the pressure on Spencer and the Xbox team to make it worth the company's time and investment will be huge. The board and shareholders will start to question whether their money is being spent wisely if they find themselves being asked to fund another glut of acquisitions in 12 months time.
 
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Well done to the CMA for at least getting some significant concessions out of MS before letting the deal go through. It was more than the FTC managed, and the concessions were more substantial than what the EC got.

Government regulation of big tech is something we need more of, and any deals like this in future need to be thoroughly looked at. Ideally the bigger the purchasing corporation, the more obstacles they should face when going on a spending spree, but current legislation isn't there yet.
 
The CMA and FTC sure made themselves look stupid. Hell, this concession doesn't even feel like one. It's just adding a middle man when MS was essentially doing the same thing anyway by licensing their games to other cloud providers.

I'm just glad this carnival of stupid is over
 
Raccoon said:
hahaha I just remembered the nintendo cod deal

"to make this deal work we pledge to put games on this stupid tablet that shouldn't even exist and won't exist when we buy the stupid fuckers in ten years"

amazing
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IIRC none of the wording about their deal specifies Switch in particular. They're just committed to bringing CoD to "Nintendo" for 10 years, which will presumably start once the Switch 2 is out.
 
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ILikeFeet said:
The CMA and FTC sure made themselves look stupid. Hell, this concession doesn't even feel like one. It's just adding a middle man when MS was essentially doing the same thing anyway by licensing their games to other cloud providers.
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MS' original proposal was licensing games to providers where the consumer would still need to purchase a license for the game directly from MS.

The new proposal cuts Microsoft out of the cloud process entire, except for allowing them to make a bid for streaming rights from Ubisoft. Aside from that, consumers will be able to get games from different cloud streaming services without needing to buy a license from MS.

You may not agree with the outcome reached by the CMA, but it is by definition more competitive.
 
Bokuringo said:
Tbh, Phil might be interested in parts of it. I can't imagine anyone wanting Embracer as a whole.
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I mean, if i was Phil and would start moves to buy Embrace, i would definitely leave their current leadership behind. ;D
 
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JazzPotatoes said:
MS' original proposal was licensing games to providers where the consumer would still need to purchase a license for the game directly from MS.

The new proposal cuts Microsoft out of the cloud process entire, except for allowing them to make a bid for streaming rights from Ubisoft. Aside from that, consumers will be able to get games from different cloud streaming services without needing to buy a license from MS.

You may not agree with the outcome reached by the CMA, but it is by definition more competitive.
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It's not. The original EU negotiated remedy provided a free and open cloud license to all consumers and platforms, that extended cross platform and covered both B2P storefronts and a subscription rate for services.

This new deal grants streaming rights wholesale to a 3rd party known for heavy monetization, who now has the rights to charge whatever they want for whatever they want and deny access as they see fit. From no angle can this be seen as more competitive.
 
JazzPotatoes said:
MS' original proposal was licensing games to providers where the consumer would still need to purchase a license for the game directly from MS.

The new proposal cuts Microsoft out of the cloud process entire, except for allowing them to make a bid for streaming rights from Ubisoft. Aside from that, consumers will be able to get games from different cloud streaming services without needing to buy a license from MS.

You may not agree with the outcome reached by the CMA, but it is by definition more competitive.
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I can't take that in good faith when the CMA's original remedy was "divest or kill the deal". there was never any cloud options on the table until after the CMA's cock-up with console marketshare and the CAT tribunal. it was never about being competitive until they were forced to go back to the table
 
My final thoughts are

1. This once again shows that the anti-trust laws in the current world are pretty horrific
2. This acquisition makes essentially no sense for Microsoft

They're buying Call of Duty, WoW, Overwatch, Diablo, and Candy Crush and none of that has any synergy with what they seemed to want to do.

They're trying to justify buying Activision despite getting seemingly 0 exclusives out of it (other than maybe blocking Diablo on the Switch 2?) by arguing that they're going to open a mobile game store... But this is the worst idea I've heard in a long time so why do that?
 
Good thing regulators went through all that trouble to [checks notes] still approve this acquisition in the end? The CMA can hang its hat on “provisionally” though. That’s something at least.

Microsoft: We want to buy another one of the biggest third party publishers.

Regulators: No.

Microsoft: Come on.

Regulators: Well, that’s a compelling argument. You got yourself a deal.
 
ItWasMeantToBe19 said:
My final thoughts are

1. This once again shows that the anti-trust laws in the current world are pretty horrific
2. This acquisition makes essentially no sense for Microsoft

They're buying Call of Duty, WoW, Overwatch, Diablo, and Candy Crush and none of that has any synergy with what they seemed to want to do.

They're trying to justify buying Activision despite getting seemingly 0 exclusives out of it (other than maybe blocking Diablo on the Switch 2?) by arguing that they're going to open a mobile game store... But this is the worst idea I've heard in a long time so why do that?
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They're getting about 1.5x their current profit margin based on the recent leak. With Xbox + ABK + ZeniMax combined Microsoft Gaming will be bringing in comparable revenue to PlayStation and comparable profit to Nintendo. This is how Xbox gets their safety net, it's like they suddenly added 3 Minecrafts with COD, WOW and Candy Crush.
 
Catsylvania said:
Good thing regulators went through all that trouble to [checks notes] still approve this acquisition in the end? The CMA can hang its hat on “provisionally” though. That’s something at least.

Microsoft: We want to buy another one of the biggest third party publishers.

Regulators: No.

Microsoft: Come on.

Regulators: Well, that’s a compelling argument. You got yourself a deal.
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The argument from regulators and forum posters is that Microsoft is so unsuccessful in gaming that they can essentially not become monopolistic (no matter how much stuff they buy) because they're so bad at this despite attempting to leverage their huge profits and influence in other sectors.

Which feels like not a great argument and just pretty sad.
 
Bokuringo said:
Tbh, Phil might be interested in parts of it. I can't imagine anyone wanting Embracer as a whole.
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I wouldn’t be against them pulling Crystal Dynamics and Eidos Montreal out of there before the house of cards falls. I still say if it wasn’t for the ActiBlizz deal they’d have gotten them right away.
 
fiendcode said:
They're getting about 1.5x their current profit margin based on the recent leak. With Xbox + ABK + ZeniMax combined Microsoft Gaming will be bringing in comparable revenue to PlayStation and comparable profit to Nintendo. This is how Xbox gets their safety net, it's like they suddenly added 3 Minecrafts with COD, WOW and Candy Crush.
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To get this existing profit they... Spent 70 billion dollars?

Yes, the future discounted profits of ABK will be almost as much as 70 billion dollars.

They... Could have just used the 70 billion dollars on something that would synergize with any of their businesses so they could generate future discounted profits of more than 70 billion dollars.

If you're arguing that Xbox itself benefits by making itself larger so it's harder to divest, I guess. But for Microsoft as a whole, this just seems like a horrible move unless they plan the high-risk move of making Call of Duty exclusive to Xbox eventually or make Call of Duty mobile exclusive to their app store.
 
ItWasMeantToBe19 said:
My final thoughts are

1. This once again shows that the anti-trust laws in the current world are pretty horrific
2.
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the court case proved Microsoft would not have a monopoly on the games market if this acquisition went through. Xbox is like a #6 company acquiring a #11
 
ItWasMeantToBe19 said:
My final thoughts are

1. This once again shows that the anti-trust laws in the current world are pretty horrific
2. This acquisition makes essentially no sense for Microsoft

They're buying Call of Duty, WoW, Overwatch, Diablo, and Candy Crush and none of that has any synergy with what they seemed to want to do.

They're trying to justify buying Activision despite getting seemingly 0 exclusives out of it (other than maybe blocking Diablo on the Switch 2?) by arguing that they're going to open a mobile game store... But this is the worst idea I've heard in a long time so why do that?
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Microsoft's aim is to get people embedded in their technological ecosystem. They basically want Microsoft to become synonymous with video gaming in the way Nintendo are. The gamble is if they can get people fully invested in gamepass or Halo or Starfield or what have you, that then people will be more likely to spend money on their computer software and other products, which form the company's bread and butter from an income standpoint.

And despite not being exclusive in the traditional sense, we're now going to see COD become synonymous with the Xbox brand. All future marketing (once existing deals have expired) will portray Xbox as the home of COD, which will be a huge boost to the console's image. For the legions of people who buy a console just for COD, many will be much more likely to choose Xbox over PS for that reason alone now. And then if they do buy an Xbox for COD, then maybe they also plump for a Gamepass sub, and then the cycle begins anew.
 
Xaltmas said:
I wouldn’t be against them pulling Crystal Dynamics and Eidos Montreal out of there before the house of cards falls. I still say if it wasn’t for the ActiBlizz deal they’d have gotten them right away.
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I expect this is something Embracer's mulling given they wrapped up CDE into their own little unit rather than fold them into any of their existing divisions. MS is already also contracting CD (Perfect Dark) and EM (Fable) for support on 1st party games.

The only wrinkle is potentially Amazon buying rights to the next Tomb Raider. I could also see them as a potential suitor for the CDE unit.
 
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Raccoon said:
hahaha I just remembered the nintendo cod deal

"to make this deal work we pledge to put games on this stupid tablet that shouldn't even exist and won't exist when we buy the stupid fuckers in ten years"

amazing
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You forgot the :) at the end to cap it all off lol.

I'm not surprised the deal is likely going to go through now. To be honest, I never saw any reason as to why it shouldn't. Microsoft is correct in that they'd still be third place and wouldn't really be put in a place where they're more competitive. I understand that after the Bethesda deal, a lot of people are worried about IP being locked to Xbox/PC only. That'll probably happen for smaller titles, but for things like Call of Duty it's unlikely. That said, Activision Blizzard's titles have mostly faltered over the last few years. This deal going through opens up the possibility for companies to make games filling gaps they'll probably have now. New IPs become popular all the time, and people leave companies to start new ones. My main thing with Activision was Blizzard software, but Diablo IV was probably my most regrettable purchase this year, and Overwatch has been ruined for me with Overwatch 2.

I'm more confused by why Microsoft wanted to buy Activision Blizzard King. I get they want strength in PC/Mobile, but I honestly have no idea what the fuck Microsoft is trying to do this generation and seemingly, neither do they. Their entire strategy seems confused and they lack any identity as a console manufacturer, buying ABK is not going to fix that. That has to come from within the corporate culture.
 
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Galgavias said:
Microsoft's aim is to get people embedded in their technological ecosystem. They basically want Microsoft to become synonymous with video gaming in the way Nintendo are. The gamble is if they can get people fully invested in gamepass or Halo or Starfield or what have you, that then people will be more likely to spend money on their computer software and other products, which form the company's bread and butter from an income standpoint.

And despite not being exclusive in the traditional sense, we're now going to see COD become synonymous with the Xbox brand. All future marketing (once existing deals have expired) will portray Xbox as the home of COD, which will be a huge boost to the console's image. For the legions of people who buy a console just for COD, many will be much more likely to choose Xbox over PS for that reason alone now. And then if they do buy an Xbox for COD, then maybe they also plump for a Gamepass sub, and then the cycle begins anew.
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I mean, I'm very skeptical that any significant amount of people will care about Call of Duty's marketing rights at all.
 
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