CMA: Activision streaming rights sale 'addressed concerns' over Microsoft acquisition

Sept. 22 (UPI) -- British anti-trust regulators said Friday they would weigh Microsoft's restructured $69 billion bid to take over video game developer Activision-Blizzard which they said cleared previous concerns.

The U.S. software giant's revised proposal to sell cloud streaming rights for Activision-Blizzard games to French developer Ubisoft "substantially addressed concerns" around the dominance the merger would give Microsoft in cloud gaming, "opening the door to the deal being cleared," the Competition and Markets Authority said in a news release.

CMA said it had opened a consultation through Oct. 6 to consider Microsoft's "proposed remedies."

In contrast to the deal CMA blocked in August, transferring the rights to Ubisoft removes Microsoft's control of cloud gaming rights for Activision content so that it would no longer be able to limit access to blockbuster games like Call of Duty, Overwatch, and World of Warcraft to its own cloud gaming service or to withhold them from rivals.

Ubisoft will be free to offer Activision's games directly to consumers and to all cloud gaming service providers however it chooses, including buy-to-play or multigame subscription services, or any new content provision model that emerges in the future.

CMA said the restructured deal with Ubisoft also addressed its concerns the takeover would restrict developers' ability to offer games on non-Windows operating systems and consoles with Microsoft now being required, on request, to port Activision games to other operating systems and support game emulators.

"The CMA's position has been consistent throughout -- this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved," said CMA Chief Executive Sarah Cardell.

"In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns.

"It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time."

The CMA's preliminary approval was welcomed by both Microsoft and Activision.

"We are encouraged by this positive development in the CMA's review process. We presented solutions that we believe fully address the CMA's remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline," Microsoft President Brad Smith said.

In a note to employees, Activision CEO Bobby Kotick said the provisional approval was the result of cooperating with regulators with an open mind and thanked the company's 9,800 staff for their efforts.

"This is a significant milestone for the merger and a testament to our solutions-oriented work with regulators. I remain optimistic as we continue the journey toward completion and am very grateful to each of you for your dedication and focus throughout this process."