Microsoft Makes a Hail Mary Bid to Finalize Activision Acquisition

Tech giant Microsoft’s acquisition of video game company Activision Blizzard continues to be a headache. After facing some back-and-forth over antitrust concerns with the Federal Trade Commission, Microsoft is now selling the rights to Activision’s cloud gaming services to video game publisher Ubisoft in a bid to appease regulators in the UK.

Microsoft announced that the company would “restructure” the deal in a blog post written by Vice Chairman Brad Smith and published yesterday. The shake-up is a response to the UK Competition and Markets Authority (CMA), which previously raised concerns over how Microsoft’s $68.7 billion deal could create an unstoppable monopoly in gaming. As such, Microsoft has issued new terms of its deal that transfers rights to all cloud streaming games on PC and console released over the next 15 years to Ubisoft. Smith says that Microsoft has submitted the new terms of the deal to CMA, which has begun an investigation that could last until October 18—if not longer.

“To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the UK Competition and Markets Authority, we are restructuring the transaction to acquire a narrower set of rights,” Smith says in the post. “Under the restructured transaction, Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service—Xbox Cloud Gaming—or to exclusively control the licensing terms of Activision Blizzard games for rival services.”

Related: UK Antitrust Investigation Is Latest Microsoft-Activision Acquisition Speedbump

CMA initially blocked the acquisition in April after reviewing the terms of the deal for nearly a year. The agency expressed concerns over how the deal could evaporate competition in the cloud-based gaming sector. CMA chairman Martin Coleman said in a release at the time that “[c]loud gaming needs a free, competitive market to drive innovation and choice.”

Microsoft’s acquisition of Activision has certainly not gone off without a hitch, much to the chagrin of the tech monolith. In December 2022, the FTC voted to sue Microsoft over the deal, citing antitrust concerns, before filing an injunction over the sale in June 2023. Hearings began later that month, with a watchdog group demanding the judge presiding over the case to be recused after it was revealed that her son worked for Microsoft. Eventually, however, the FTC was left with its tail between its legs and the judge ruled Microsoft could continue with the sale.