Selling Actiblizz cloud gaming rights to Ubi will ensure “open competition”, CMA says
The UK’s Competition and Markets Authority have “provisionally” approved Microsoft’s proposed acquisition of Activision Blizzard, removing the last major legal obstacle to the completion of the deal.
The CMAblocked the deal in Aprilthis year over concerns that it would “alter the future of the fast-growing cloud gaming market”, and might lead “to reduced innovation and less choice for UK gamers over the years to come”. Microsoft attempted to woo the regulator by agreeing tosell Activision Blizzard game cloud streaming rights to Ubisoft, and while the CMA have “limited residual concerns”, they’ve largely accepted Microsoft’s modifications.
According to aUK government statement, the “sale of the cloud gaming rights will establish Ubisoft as a key supplier of content to cloud gaming services, replicating the role that Activision would have played in the market as an independent player”.
This means that “Microsoft will no longer control cloud gaming rights for Activision’s content, so would not be in a position to limit access to Activision’s key content to its own cloud gaming service or to withhold those games from rivals.”
“The deal with Ubisoft also requires Microsoft to port Activision games to operating systems other than Windows and support game emulators when requested, addressing the other main shortcoming with the previous remedies package.”
The statement namechecksCall of Duty,Overwatch, andWorld of Warcraftas games Microsoft might have rendered exclusive to their cloud gaming services, under the original terms of the deal, so as “to stifle competition”. It expresses confidence that selling Actiblizz cloud gaming rights to Ubisoft will maintain “open competition as the market for cloud gaming develops over the coming years”.
So what of the CMA’s lingering quibbles? “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,” the statement adds.
The CMA’s CEO Sarah Cardell acknowledged that Microsoft have “substantially restructured the deal, taking the necessary steps to address our original concerns”, but grilled the company over their tardiness.
“It would have been far better, though, if Microsoft had put forward this restructure during our original investigation,” Cardell said. “This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”
In theory, the CMA’s announcement brings an end to around two years of haggling over one ofthe games industry’s largest feats of consolidation, which was previouslyblocked by the USA’s Federal Trade Commission, leading to court proceedings that, amongst other things, brought a lot of insider information to light about Microsoft’s gaming empire andfuture plans. The CMA’s decision probably won’t assuage those of us who feelhuge corporations buying up every competitor and IP in sight isn’t great for the medium.
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