Microsoft’s Purchase of Activision Blizzard Clears Major Hurdle

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Microsoft’s attempt to acquire Activision Blizzard is back on track. An updated report from the United Kingdom’s Competition and Markets Authority (CMA) is a significant step toward the deal’s approval. Finally, after months of uncertainty, it seems like the deal is headed to the finish line. 

An initial report in February says that a merger between Microsoft and Activision Blizzard would lead to “higher prices, fewer choices, or less innovation for UK gamers.” After obtaining new evidence, the CMA now says that should the deal go through, it would not result in a “substantial lessening of competition in relation to console gaming in the UK.”

“The CMA has received a significant amount of new evidence in response to its original provisional findings,” the report states. “Having considered this new evidence carefully, together with the wide range of information gathered before those provisional findings were issued, the CMA inquiry group has updated its provisional findings and reached the provisional conclusion that, overall, the transaction will not result in a substantial lessening of competition in relation to console gaming in the UK.”

What About the Microsoft Activision Blizzard Deal Changed for the UK CMA?

From the start, the UK CMA’s most significant concern with the deal pertains to Microsoft’s presence in PC operating and cloud systems. While many focus on whether or not it is beneficial for Microsoft to make games like Call of Duty and other Activision or Blizzard titles exclusive, the UK CMA highlights Microsoft’s stronghold on cloud gaming services. 

Their February report mentions that Microsoft accounts for 60 to 70 percent of all global cloud gaming services. Since that report, however, Microsoft has made deals with several competing gaming cloud services. 

10-year agreements now exist with Boosteroid and NVIDIA GeForce Now. As a result, an additional 30 million global users can access Microsoft’s games. Should their deal with Activision Blizzard go through, this includes titles like Call of Duty, Starfield, and others.

While the UK CMA is still considering new data concerning cloud gaming services, Call of Duty, in particular, causes this updated report. 

Does the UK CMA Still Feel It’s Beneficial for Microsoft To Make Call of Duty Exclusive?

As mentioned earlier, another chief concern is whether or not high-profile games like Call of Duty would become Xbox exclusive. It’s a fair argument that rival PlayStation console maker Sony has been making. Microsoft has a ten-year agreement offer to ensure Call of Duty releases on PlayStation consoles. Sony, however, has not accepted the deal. 

Nintendo, another competing hardware maker, did accept that same deal earlier this year. The UK CMA had a concern about this agreement in March. However, their updated findings believe it is no longer a concern.   

The new findings from the CMA indicate that “new data (which provides better insight into the actual purchasing behaviour of CoD [Call of Duty] gamers) indicates that this strategy would be significantly loss-making under any plausible scenario. On this basis, the updated analysis now shows that it would not be commercially beneficial to Microsoft to make CoD exclusive to Xbox following the deal, but that Microsoft will instead still have the incentive to continue to make the game available on PlayStation.”

When Is a Final Ruling on the Deal Expected?

The updated findings reiterate that the CMA’s “provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement.” Given their new beliefs concerning Call of Duty and Microsoft bringing their games to competing cloud gaming services, this feels like a step toward approval. 

The investigation is still underway, and a final report from the UK is due by April 26th.

The European Commission recently delayed its ruling on the deal to May 22nd. Sources believed they will approve the acquisition.


Written by Jake Valentine

I am the Editor-In-Chief of BossLevelGamer. I'm also a lover of video games, food, and beer.

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