Microsoft’s Bid to Acquire Activision Blizzard Receives Provisional Approval from CMA
Since its initial announcement in January 2022, Microsoft’s bid to acquire Activision Blizzard has been a major topic of discussion in the gaming industry. Valued at $69 billion, this deal would be the largest in gaming history. However, the acquisition faced backlash from competitors and regulators due to its potential impact on the market.
One of the regulators, the UK’s Competitions and Markets Authority (CMA), expressed concerns about the deal’s effects on competitors and consumers. While initially investigating the acquisition’s potential impact on Sony, the CMA ultimately blocked the deal. The regulator highlighted Microsoft’s dominant position in cloud gaming as a risk to innovation and the development of the industry.
Microsoft and Activision Blizzard appealed the decision, and Microsoft later sold its cloud gaming rights to Ubisoft. This development seems to have convinced the CMA, as they recently issued a statement declaring that Microsoft’s proposed remedies have addressed the concerns. The CMA has provisionally approved the deal.
“In contrast to the original deal, 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. Unlike the remedies the CMA previously rejected, Ubisoft will be free to offer Activision’s games both directly to consumers and to all cloud gaming service providers however it chooses, including for buy-to-play or multigame subscription services, or any new model for providing content that might emerge as the market develops.
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.”
Mobile Gaming’s Significance in the Deal
While regulators have primarily focused on console, PC, and cloud gaming, Microsoft has consistently emphasized that mobile gaming is a key driver for this acquisition. Google, in particular, opposed the deal over concerns that Microsoft could make King titles exclusive to its app store. While console and PC gaming are undoubtedly essential aspects of the deal, Microsoft’s decision to sell its cloud gaming rights rather than independently purchase mobile subsidiary King indicates the significance of mobile gaming in this acquisition.
Although overlooked by many, the implications of this deal for the mobile gaming space are profound. With the CMA provisionally approving the deal, it is only a matter of time before this long-running saga reaches its conclusion. The involvement of mobile gaming in the biggest gaming acquisition to date has significant implications for future acquisitions of this magnitude. As major PC and console developers increasingly focus on expanding into mobile gaming, multi-platform developers with a strong presence in the mobile space will likely become attractive acquisition targets.
We have previously recognized Activision Blizzard as one of the top 50 mobile game makers in 2023.