Summer is officially over and so, perfectly on time, one of the summer catchphrases (even if born much earlier) seems destined to end. This is the Microsoft-Activision deal, an acquisition worth almost 69 million dollars destined to revolutionize the world of gaming. But it has seen fierce opposition from various antitrust bodies.
In recent weeks only the CMA, the British antitrust authority, was still hindering Microsoft’s acquisition of Activision. But now things really seem to be smoothing out. Let’s find out what happened.
The CMA’s preliminary positive opinion
CMA is an acronym for Competition & Markets Authority, i.e. the British antitrust authority, the last bastion against the Microsoft-Activision deal.
Nevertheless, in the last few hours the preliminary green light has arrived from the institution, which overturns its point of view and makes the acquisition almost a given. As we can read in a statement that appeared on the CMA’s official website on Friday 22 September, what changed the mind of the British antitrust authority was the sale to Ubisoft of the cloud streaming rights of all Activision Blizzard titles.
Let’s remember what it is.
The sale of streaming rights to Ubisoft
The CMA’s doubts, which led it to veto the Microsoft-Activision deal, were linked to fears that the acquisition would lead to a monopoly situation in the cloud gaming sector (streaming games).
In reality, Microsoft had already started new negotiations with the CMA in July. And the British antitrust authority had declared: “The CMA authority stands ready to consider any proposal from Microsoft to reshape the terms of the transaction, in such a way as to overcome the concerns set out in our final report”.
Then, here is the decisive move, last August. When Ubisoft, a French multinational video game developer and publisher, announced the acquisition of cloud streaming rights for all Activision Blizzard titles due out in the next 15 years (but only outside the European market).
Immediately after the news, Sarah Cardell, CEO of the CMA, made cautious statements: “This is not a green light. We will carefully and objectively evaluate the details of the restructured transaction and its impact on competition, including in light of third-party comments.”
The green light from the CMA
Cardell was as good as her word. And the CMA took a month. But in light of the press release it seems that the antitrust doubts have now dissipated. We can in fact read in the note: “Although the CMA has identified some residual concerns related to the new agreement, Microsoft has proposed remedies that should resolve a large part of the reported problems.”
And again: “The CMA believes that the revised agreement makes important changes which substantially address the concerns raised in relation to the original transaction earlier this year.
In particular, the sale of Activision’s cloud streaming rights to Ubisoft will prevent this important content – including games like Call of Duty, Overwatch and World of Warcraft – from coming under Microsoft’s control in relation to cloud gaming. […] The new deal instead involves the transfer of cloud streaming rights for Activision games to an independent player, Ubisoft, keeping competition open as the cloud gaming market develops over the next few years.”
The final decision will be made on October 6th
In the statement, however, the CMA expresses some residual doubts “that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft may be circumvented, terminated or not enforced.” Even though, the note continues, Microsoft has offered all the necessary guarantees. Because of this the body gave an initial unofficial green light, but set an appointment for October 6th for the final approval, after a final consultation.
Microsoft, for its part, must complete the operation by October 18, to avoid incurring the record penalty of 3 billion dollars.
Microsoft-Activision deal: comments
Weeks later, and in light of the transfer of cloud gaming rights to Ubisoft, Sarah Cardell returns to the Microsoft-Activision deal. Che said: “The CMA’s position has been consistent at all times: this merger would only proceed if competition, innovation and choice in cloud gaming were preserved. In response to our original ban, Microsoft has now substantially restructured the agreement, taking the necessary steps to allay our initial concerns.”
And Microsoft president Brad Smith added: “We are encouraged by the positive development of discussions with the CMA. We have proposed valid solutions in response to the reported problems, and we will continue to work to receive the green light by October 18th.”