Microsoft has launched a fresh attempt to acquire Activision Blizzard, the maker of Call of Duty, in what could become the largest gaming industry deal. This renewed bid comes after the original $69 billion (£59 billion) offer was blocked by UK regulators.
Brad Smith, President of Microsoft, asserts that the new offer is “substantially different” from the previous one and should be granted approval. However, the UK Competition and Markets Authority (CMA) emphasized that this new development is not a definitive green light for the deal.
The CMA, responsible for reviewing the revised proposal, is expected to reach a decision by October 18th. Microsoft’s ambition is to bolster demand for its Xbox console and gaming subscription service through this merger.
The updated bid includes a significant change: Microsoft intends to transfer the rights to stream Activision games from the cloud to Ubisoft, a video game publisher, for a span of 15 years. This modification aims to address concerns about monopolistic control and exclusivity.
Mr. Smith clarifies that under this new arrangement, Microsoft won’t have the exclusive ability to stream Activision Blizzard games solely on its own cloud service, Xbox Cloud Gaming. Nor will it exclusively control the licensing terms for these games on rival platforms.
Ubisoft would distribute Activision’s content to all cloud gaming service providers
While Microsoft’s initial offer was approved in numerous countries, including the EU and China, the UK’s CMA blocked the deal in April, raising concerns about its potential impact on innovation and consumer choice in the rapidly growing cloud gaming sector.
The revised terms suggest that Ubisoft would distribute Activision’s content to all cloud gaming service providers, including Microsoft itself. Activision’s CEO, Bobby Kotick, expressed the sentiment that the deal, despite being a prolonged journey, would experience minimal changes under the new bid.
The potential merger aims to expand Microsoft’s Xbox Game Pass streaming service by adding more titles to its catalog. This subscription-based service enables users to access a library of games from the cloud.
The regulatory landscape for this deal involves approval from authorities in the UK, the US, and the EU. While the new bid presents a fresh opportunity for approval, the CMA remains focused on ensuring that competition in the growing cloud gaming market remains open and effective, fostering innovation and choice.
