In a strategic move to acquire gaming giant Activision Blizzard, Microsoft has put forth a revised deal after its initial $69 billion bid faced rejection from the UK competition watchdog.
The tech conglomerate’s UK boss, Brad Smith, expressed confidence in the new offer’s approval, emphasizing its substantial differences. However, the UK’s Competition and Markets Authority maintained that this move doesn’t signify a definitive green light.
The Competition and Markets Authority will now conduct a thorough review of the altered deal, setting a decision deadline of October 18. The outcome of this review holds the key to the deal’s progression on a global scale.
Under the new offer, Microsoft will not acquire the rights to Activision’s existing or future cloud-based games.
The 15-year commitment does not include Activision’s PC and console games in the European Economic Area.
Similar to a streaming service such as Netflix, cloud-based games enable players to purchase content at their convenience.
Microsoft’s acquisition of Call of Duty last year was expected to be the largest in gaming industry history. However, it has divided regulators around the world, with some fearing it will be anti-competitive.
Despite numerous court rulings to the contrary, the US Federal Trade Commission continues to try to block the agreement in the United States.
Meanwhile, the European Union and China have stated that the alliance can proceed.
But, the United Kingdom announced plans to block the deal in April, warning that it would harm innovation and choice for gamers in the rapidly growing cloud gaming industry.
The move sparked an angry reaction from Activision, while Microsoft’s UK president Brad Smith said it was “bad for Britain” and marked Microsoft’s “darkest day” in its four decades of working in the country.
A New Chapter in Gaming: Microsoft’s Strategy Shift with Activision Acquisition
Under the revised agreement, Microsoft will no longer control all of Activision’s games, including Candy Crush, and will instead sell the content to rival video game publisher Ubisoft.
Ubisoft can then distribute Activision’s content “to all cloud gaming service providers, including Microsoft.”
Mr Smith said the deal had been “a longer journey than expected,” but under the new terms, he said: “Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service—Xbox Cloud Gaming—or to exclusively control the licensing terms of Activision Blizzard games for rival services.”
Microsoft creates the Xbox gaming console and wishes to acquire Activision in order to expand its Game Pass streaming service. This enables gamers to download content to their consoles and mobile phones.
Modern Warfare 2, the latest installment in the Call of Duty series, made $1 billion in its first weekend, with PlayStation accounting for more than half of all sales in the UK.
Sarah Cardell, CEO of the CMA, highlighted the substantial differences in the new deal compared to the previous proposal.
“We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments,” she said.
“Our goal has not changed; any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”