UK Clears Microsoft's Activision Acquisition Without Cloud Gaming Rights

UK’s Competition and Markets Authority or CMA said on Friday that it has cleared the acquisition of Activision Blizzard, Inc. (ATVI) by tech giant Microsoft Corp. (MSFT) without cloud gaming rights.

The decision was taken after the UK competition regulatory authority concluded that the deal would now preserve competitive prices and better services.

As per the concession made by Microsoft in August, gaming company Ubisoft Entertainment SA (UBSFY) would buy Activision’s cloud gaming rights.

CMA believes the new deal will stop Microsoft from locking up the competition and will help Ubisoft to offer Activision’s content under any business model, including through multigame subscription services.

CMA noted that Microsoft already has a strong position in relation to cloud gaming and has popular games like Call of Duty, Overwatch, and World of Warcraft under its belt.

It was in January last year that Microsoft agreed to buy Activision for $95.00 per share, in an all-cash deal valued at $68.7 billion. The acquisition was then expected to close in fiscal 2023.

However, the deal faced severe scrutiny ever since from regulators around the world over concerns that it would alter the future of the fast-growing cloud gaming market.

“The new deal will put the cloud streaming rights for all of Activision’s PC and console content produced over the next 15 years in the hands of a strong and independent competitor with ambitious plans to offer new ways of accessing that content,” the CMA said in a statement.

Additionally, the new deal will ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing the costs.

On Thursday’s regular trading on Nasdaq, Microsoft shares closed at $331.16, down 0.38% and Activision shares closed at $94.42, down 0.05%.

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