UK Regulator Gives Preliminary Nod to Microsoft's Acquisition of Activision Blizzard

In a significant development, the UK's Competition and Markets Authority has given preliminary approval to Microsoft's proposed acquisition of Activision Blizzard, with a final decision expected by October 6. The regulator had initially blocked the deal due to concerns over its impact on competition in the cloud gaming space. However, Microsoft's revised proposal, which includes selling cloud gaming rights to Ubisoft, has alleviated most of these concerns. The CMA believes this sale will establish Ubisoft as a major content supplier for cloud gaming services, thereby preventing Microsoft from making these games exclusive to its own ecosystem. Additionally, the deal requires Microsoft to make Activision games compatible with non-Windows operating systems and support game emulators. Although the CMA still has some residual concerns, Microsoft has offered further remedies to address these issues. The regulator is now consulting on these remedies and is expected to make a final decision soon. The deal's completion deadline has been extended to October 18, with Microsoft facing a $4.5 billion fee if it fails to meet this deadline. The CMA's CEO, Sarah Cardell, emphasized the importance of preserving competition, innovation, and choice in cloud gaming, while Microsoft's president, Brad Smith, welcomed the preliminary decision as a positive development. Activision Blizzard's CEO, Bobby Kotick, also expressed optimism about the deal's prospects, thanking employees for their dedication throughout the process.