Microsoft's $68.7 billion Activision investment removes fundamental limitations after the UK regulator provisionally agrees on exchange

September 25, 2023: On Friday, Microsoft’s $68.7 billion Activision investment removed fundamental limitations after the UK regulator provisionally agreed to exchange.

The U.K. Competition and Markets Authority has provisionally approved Microsoft’s proposed acquisition of Activision Blizzard after concerns about its impact on the cloud gaming sector. Microsoft initially faced regulatory scrutiny over the $69 billion deal, with concerns that it could harm competition in the growing cloud gaming industry.

Microsoft proposed a unique takeover agreement to divest cloud gaming rights for existing and future Activision PC and console games to French game publisher Ubisoft Entertainment

to address these concerns. The CMA has provisionally concluded that Microsoft’s remedies should address most of the remaining problems. However, it still has limited residual misgivings about specific provisions related to selling cloud gaming rights to Ubisoft.

Microsoft and Activision both welcomed the CMA’s announcement and expressed their commitment to working toward regulatory approval for the acquisition.

The CMA’s concerns revolve around the potential for Microsoft to gain an advantage in the emerging cloud gaming market, where users can stream games via subscription services. This market can eliminate the need for specialized gaming consoles, allowing players to access games on various devices.