UK CMA confirms block of Microsoft’s acquisition of ActiBlizz, prompting a restructuring of the deal

Popcorn appropriately.

The UK’s Competition and Markets Authority continues to be a hard hurdle for Microsoft and Activision-Blizzard to clear. As a refresher, the UK government body put a pause to the merger in April, elected to reopen consideration in July, then sought additional remarks on the merger near the beginning of this month. At the heart of the CMA’s hand-wringing is concern for Microsoft’s position in the cloud gaming market, which spurred the company to sign 10-year agreements for Activision games to stay on cloud streaming services including Nvidia, Boosteroid, and Ubitus as a concession to let the buyout proceed in the country.

As of yesterday, the process has effectively hit a reset button: Microsoft announced a restructuring of the acquisition to directly respond to the CMA’s hangups, adding an agreement with Ubisoft that guarantees cloud streaming rights “in perpetuity” for all current and new ActiBlizz PC and console games over the next 15 years.

This adjustment to the buyout is in direct response to the CMA confirming that it would block the original deal, which in turn has triggered a new phase one investigation into the acquisition by the CMA. A statutory deadline of October 18th has been set for the government body to reach a final decision.

“We believe that this development is positive for players, the progression of the cloud game streaming market, and for the growth of our industry,” reads Microsoft’s announcement. “Today’s development brings us one step closer to bringing the joy of gaming to players everywhere.”

CMA chief executive Sarah Cardell issued her own statement that suggests regulators are not done with the matter. “This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition,” reads her statement. “Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”

Further reading:

sources: press release, and Microsoft blog via VG247
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