Microsoft’s Acquisition of Activision Blizzard Expected to Be Approved in the UK
Today marks the beginning of a decisive week for Microsoft's proposed acquisition of Activision Blizzard, the $68.7 billion deal (by far the biggest ever attempted in the gaming industry) that rocked the entertainment and technology world when it was first announced in January 2022.
The United Kingdom's Competition and Markets Authority (CMA) will render its final verdict on Wednesday, April 26th. The CMA had seemed the fiercest thorn on Microsoft's side, having indicated its competition concerns about the deal as early as September 2022. Shortly after that, they launched a deeper probe into the acquisition of Activision Blizzard, and as recently as two months ago, prospects looked dire for Microsoft as the CMA said in a press release that the deal could harm UK gamers, both in the burgeoning cloud market and in the established console market, where Microsoft would have reason to make the Call of Duty franchise a partial or total exclusive to Xbox consoles.
For its part, Microsoft always denied that, saying it didn't make any sense from a financial standpoint. In a surprising turn of events, the CMA did a U-turn last month on the competition concerns related to the console market, admitting that it would be heavily damaging for Microsoft to remove Call of Duty from the PlayStation platforms. As such, it dropped its concerns about the console market.
That decision didn't directly affect the cloud market concerns, but Microsoft has been making strides in that regard with four separate 10-year deals to bring all its games (including those of Activision Blizzard should the deal be approved) to cloud gaming services like GeForce NOW, Boosteroid, Ubitus, and UK Internet service provider EE. As such, Microsoft's chances of getting it through the gates seemed far better, and the latest comment made by the Financial Times on the deal strengthens that belief.
In this paywalled article, the esteemed London-based business newspaper wrote:
It is also a big week for Big Tech with quarterly results from Amazon, Alphabet, Meta and Microsoft. The latter will also have an eye on the UK, where on Wednesday the Competition and Markets Authority is due to finally rule on whether to block the technology company's $69bn takeover of games maker Activision Blizzard, although this is likely to prove a damp squib as the CMA is expected to support it.
Of course, this remains a rumor, but The Financial Times usually has excellent sources. If the UK approved the deal, Microsoft would be very close to succeeding in its goal. The European Union is also expected to share its ruling shortly, but previous rumors also suggested they would approve it.
At that point, the only remaining obstacle would be the Federal Trade Commission in the United States which sued to block the deal in December. An evidentiary hearing is expected in August, but the FTC could reconsider going through a full-on court battle where they might very well lose in the face of approvals from every other country. As a reminder, Japan, South Africa, Chile, Brazil, Serbia, and Saudi Arabia have already waved it through.
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