Game-Changer: Microsoft Crushes CMA !!!

In a groundbreaking move, Microsoft has taken substantial steps to address the Competition and Markets Authority (CMA) concerns regarding its acquisition of Activision’s cloud gaming rights.

This pivotal development not only safeguards competition but also paves the way for the deal’s clearance.

The New Deal: A Turning Point

Earlier this year, the CMA blocked Microsoft’s attempt to acquire Activision entirely, citing concerns about potential harm to competition within the UK’s cloud gaming landscape.

In response, Microsoft proposed a revamped transaction in August, aiming to address these concerns.

Under the revised deal, Microsoft will not directly acquire Activision’s cloud gaming rights.

Instead, these rights will be transferred to an independent third party, Ubisoft Entertainment SA (Ubisoft), before the deal’s completion.

Ubisoft: A New Key Player in Cloud Gaming

The sale of cloud gaming rights to Ubisoft positions the company as a significant content provider for cloud gaming services, mirroring the role initially envisioned for Activision.

Unlike the original deal, Microsoft will no longer wield control over Activision’s cloud gaming rights, eliminating the possibility of restricting access or withholding games from competitors.

Ubisoft gains the freedom to offer Activision’s games directly to consumers and all cloud gaming service providers, fostering open competition and innovation.

Furthermore, Microsoft’s agreement with Ubisoft mandates the porting of Activision games to operating systems beyond Windows and supporting game emulators upon request, addressing previous shortcomings in the remedies package.

CMA’s Positive Outlook

The CMA acknowledges that the restructured deal represents a significant departure from the previous transaction and effectively mitigates most of its concerns.

Most notably, the transfer of Activision’s cloud streaming rights to Ubisoft ensures that vital content, including beloved titles like Call of Duty, Overwatch, and World of Warcraft, remains outside Microsoft’s control in the realm of cloud gaming.

The CMA’s initial apprehension stemmed from Microsoft’s dominant position in cloud gaming services and its potential to stifle competition.

With this new arrangement, cloud streaming rights for Activision’s games are entrusted to Ubisoft, preserving a competitive landscape as the cloud gaming market evolves.

Addressing Residual Concerns

While the restructured deal makes substantial strides, the CMA still harbors limited concerns regarding potential circumvention, termination, or non-enforcement of certain provisions within the transfer of cloud streaming rights to Ubisoft.

To assuage these concerns, Microsoft has proposed remedies that would ensure the enforceability of these terms.

The CMA is provisionally confident that these added protections will resolve any lingering worries.

Consultation and Stakeholder Views

The CMA has initiated a consultation process, open until October 6th, to gather feedback on Microsoft’s proposed remedies.

Colin Raftery, Senior Director of Mergers and Phase 1 Decision Maker, emphasized the importance of this deal, stating, “This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft.”

Sarah Cardell, CEO of the CMA, reiterated the agency’s commitment to preserving competition, innovation, and choice in cloud gaming.

She noted, “This merger could only go ahead if competition, innovation, and choice in cloud gaming were preserved.”

Learn More About the Restructured Transaction

For those interested in exploring the details of the restructured transaction, the new Phase 1 investigation, and how to submit comments, comprehensive information is available on the Microsoft / Activision Blizzard (ex-cloud streaming rights) merger inquiry.

Conclusion: A Pivotal Step for Cloud Gaming

Microsoft’s strategic pivot, entrusting Activision’s cloud gaming rights to Ubisoft, marks a significant turning point for the industry.

This innovative solution addresses CMA concerns, ensures fair competition, and opens up new possibilities for cloud gaming’s future.

As the consultation period unfolds, the gaming community eagerly awaits the final verdict, anticipating an era of enhanced choice and innovation in the world of cloud gaming.