Microsoft’s revamped Activision deal gets provisional approval

Microsoft and Activision’s revamped merger “opens the door” to the deal being completed, the UK’s competition regulator has said.

Under the terms of the revised deal, Activision will sell its cloud gaming rights to Ubisoft instead of Microsoft before the $69bn (£54bn) takeover is completed.

The renegotiated deal keeps gaming franchises such as Call of Duty and World of Warcraft from falling into Microsoft’s ownership “in relation to cloud gaming”, the Competition and Markets Authority (CMA) said.

Microsoft is required to port Activision games to non-Windows operating systems and must support game emulators on request.

Colin Raftery, senior director of mergers and phase one decision maker at the CMA, said: “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.”

In April, the CMA initially blocked the merger over concerns that Microsoft could restrict Activision’s content to its own gaming platform, sparking public criticism of the UK’s competitiveness from the two companies’ executives.

Last month, the CMA took the unusual step of re-examining the deal.

Sarah Cardell, CEO of the CMA, said: “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.”

A consultation on Microsoft’s proposed changes will now take place up to 6 October.

“In practical terms, it has given interested parties two weeks to comment on the remedies proposed before reaching a final decision, but it now seems inevitable that the deal with receive full and final clearance,” said Alex Haffner, specialist competition lawyer and partner at UK law firm Fladgate.