By Sagar Mankar 
After nearly two years of grappling, Microsoft has finally succeeded in its ambitious attempt to acquire the gaming behemoth, Activision Blizzard.
This means famous titles produced by Activision Blizzard including – Call of Duty, Crash Bandicoot, Guitar Hero, Tony Hawk’s, Spyro, Skylanders, World of Warcraft, StarCraft, Diablo, Hearthstone, Heroes of the Storm, Overwatch, – will soon be the canon of Xbox.
This much-anticipated purchase has finally gained approval from the U.K.’s Competition and Markets Authority (CMA), following a series of strict conditions and significant concessions by Microsoft.
CMA’s Conditions for Approval
Microsoft’s plan to acquire Activision Blizzard raised worries about the company gaining too much control over cloud gaming. The U.K.’s CMA was particularly concerned about the impact on competition in this space.
To address these concerns, Microsoft agreed to divest the cloud streaming rights for all current and future Activision Blizzard games to Ubisoft, a well-known French video game publisher.
Under the agreement, Ubisoft will get the rights to stream Activision’s PC and console games via the cloud in regions outside of the European Economic Area (EEA) for the next 15 years. Microsoft, however, will retain access to these streaming rights within the EEA.
Ubisoft’s extensive experience in the streaming arena, like it made some successful collaborations with major players like Google, Amazon, and NVIDIA, apparently played an important role in Microsoft’s decision.
Ubisoft will also get the freedom to license these games to any cloud gaming service provider, including those competing with Microsoft.
Despite the divestment, Microsoft can still offer Activision Blizzard games on its own platforms, including Xbox Game Pass and Xbox Cloud Gaming. However, it will need to do so under a licensing agreement with Ubisoft.
Note: EEA is a single market where free movement of goods, capital, services, and people is allowed between member states – Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden, Iceland, Liechtenstein and Norway and Switzerland.
A Boost for Ubisoft Plus
As a result of the deal, Ubisoft Plus, the company’s game subscription service, will now feature an array of Activision Blizzard games. This will significantly boost the service as it holds the power to host all of Activision Blizzard’s old and new game catalogs on its platform.
Moreover, Ubisoft will also decide which cloud services can stream games like Call of Duty outside EEA. If Microsoft wants to use these cloud-based gaming services, it will need to pay Ubisoft a fee.
Although it’s not clear when all these games will be available to Ubisoft Plus, they are already being added to the service.
The CMA’s Stance on Acquisition Deal
After the “sealed deal,” Sarah Cardell, the Chief Executive of the UK’s Competition and Markets Authority (CMA), underlined how this move will help keep prices competitive and offer consumers more choices.
Speaking to Bloomberg Television, she highlighted that the CMA’s decision was driven by concerns that the original deal structure would have given Microsoft too much control over this market. Cardell said:
“By preventing Microsoft from monopolizing the cloud gaming market, we are ensuring that gamers have more choices and that innovation can flourish in the gaming industry.”
Cardell pointed out that cloud gaming is an important and growing segment of the gaming industry, with the potential to revolutionize how games are accessed and played. The CMA’s intervention was seen as crucial to maintaining an open and competitive environment in this space.
The new deal is intended to ensure that Microsoft would not have excessive control over the availability and distribution of Activision Blizzard’s games in the cloud gaming market. She said:
“The divestment to Ubisoft ensures that Microsoft’s acquisition of Activision Blizzard will not harm competition in the cloud gaming market, allowing for more innovation and choice for consumers.”
Cardell also highlighted the importance of CMA’s ongoing efforts to ensure that large tech acquisitions do not stifle competition. She said:
“Our decision reflects our dedication to preserving fair competition and ensuring that no single company can dominate a market to the detriment of competitors and consumers.”
Microsoft’s Road to Activision Blizzard Acquisition
Here is the complete timeline of this deal:
– January 18, 2022: Microsoft announced its intention to acquire Activision Blizzard for approximately $68.7 billion in an all-cash deal.
– February 2022: Various regulatory bodies worldwide began examining the deal to assess its impact on competition in the gaming industry.
– March 2022: The U.S. Federal Trade Commission (FTC) started investigating the deal to ensure it complied with antitrust laws.
– September 1, 2022: The UK’s Competition and Markets Authority (CMA) launched its initial (Phase 1) investigation, focusing on whether the deal could lead to a substantial lessening of competition in the UK gaming market.
– October 14, 2022: The CMA escalated its investigation to Phase 2, which involved a more in-depth review. Concerns were raised about the potential impact on competition, particularly regarding Microsoft’s Xbox platform and the implications for game availability on rival platforms like Sony’s PlayStation.
– December 8, 2022: The FTC filed a lawsuit to block the acquisition, citing concerns that Microsoft could use its control over Activision Blizzard’s games to suppress competition.
– February 8, 2023: The CMA published its provisional findings, expressing significant concerns that the deal could harm competition in the gaming industry, particularly in cloud gaming and console markets.
– April 26, 2023: The CMA formally blocked the acquisition, primarily over concerns that it would stifle innovation and reduce competition in the nascent cloud gaming market. This decision marked a significant hurdle for Microsoft.
– July 11, 2023: The U.S. federal judge dismissed the FTC’s attempt to block the deal, ruling in favor of Microsoft.
– July 18, 2023: Microsoft and Activision Blizzard appealed the CMA’s decision, and both companies began negotiating with the CMA to find a resolution.
– August 22, 2023: The CMA reopened its investigation after receiving a revised proposal from Microsoft. The new terms sought to address the competition concerns raised by the CMA.
– September 22, 2023: After months of negotiation, the CMA granted conditional approval for the acquisition. Microsoft agreed to certain commitments to ease the CMA’s concerns, particularly about cloud gaming.
– October 13, 2023: Microsoft completed its acquisition of Activision Blizzard, following the final clearance from the UK’s CMA.
Microsoft Widening Its Reach Through Cloud Gaming Deals
Following the CMA’s approval, Microsoft has been busy securing cloud gaming deals in the UK and Europe to broaden the availability of Activision Blizzard’s games across different platforms and regions. Partnerships with companies like Nvidia, Boosteroid, Nware, Ubitus, and EE in the UK are helping them to create an extensive gaming environment.
Microsoft has also promised to keep Call of Duty available on Valve’s Steam store, ensuring gamers don’t have to run for different platforms all of a sudden.
So many stories to tell, so many characters to meet, so many worlds to explore…
It’s a good day to play: https://t.co/6i3RHmwsNZ pic.twitter.com/y7t2Q5mtrD
— Xbox (@Xbox) October 13, 2023
In conclusion, Microsoft’s acquisition of Activision Blizzard marks a significant shift in the cloud gaming industry, with Ubisoft playing a crucial role in distributing and streaming these major gaming titles. It’s interesting to see how this deal actually unfolds.
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