For a fleeting moment, it seemed as though the months of delays in Microsoft’s quest to acquire Activision Blizzard in a deal worth $69 billion were finally coming to an end, but it’s not to be. It seems an eternity has passed since the American corporation first started its pursuit of the Video game company, but it seems they are no closer to acquiring Activision Blizzard than when it first started. The most recent news that the European Union regulators approved Microsoft’s acquisition of the gaming firm should have been cause for celebration. The fact that the European Commission was now satisfied Microsoft had addressed their grievances should have been the final hurdle to clear. But the UK has doubled down on its stance from last month as they continue to block the deal despite months of back and forth in this endless saga. But what does this mean for the viability of the deal in the future? And why is the UK vetoing the agreement?
It was only back in December when Microsoft had agreed a deal with Nintendo that sought to put any worries over ring-fencing the market to bed, but five months down the line, the same issue is rearing its ugly head in a different form. In late 2022 Xbox head Phil Spencer announced that Microsoft had entered a 10-year-long deal with Nintendo to keep Call of Duty on its platforms. The agreement came shortly after the company confirmed it offered the same deal to Sony. However, it was dependent on Microsoft closing on its acquisition of Activision Blizzard Inc. At the same time, they committed to keeping Call of Duty on Steam even as it headed to Xbox and PC Game Pass, a deal they worked out with Valve. Spencer announced the agreement between Xbox and Nintendo via his personal Twitter account, in which he also stated Call of Duty would continue to launch on Steam after the acquisition had gone through. The move served dual purposes. It put pressure on Sony to accept the same sort of 10-year deal for Call of Duty that they had already been offered. But mainly, it was a performance for regulators to paint PlayStation and Sony as unreasonable in their negotiations as the only big platform to resist accepting the deal despite assurances from Microsoft that it didn’t plan on taking the series exclusively. As of May this year, those specific issues are behind us, but the same concern over Microsoft setting the terms and conditions for the market continues to arise. It seems as though this is far from the last of Microsoft’s problems in the dispute surrounding their buyout of Activision.
The hold-up on the EU’s end until now has been in seeking assurances that Microsoft wouldn’t restrict Sony’s ability to have certain games on their platforms once the acquisition had gone through, as was the issue in December. Sony had led industry opposition to the takeover, arguing that any limitation on Call of Duty’s availability on PlayStation would harm the console’s sales, so it’s understandable why their approach has been anything but welcoming up to this point. However, the latest iteration of this saga has seen the EU accept that Microsoft’s remedies and commitments regarding cloud gaming are sufficient enough to let the deal go through. These remedies include giving a free license to consumers in EU countries that would allow them to stream using any cloud game streaming services for all current and future Activision Blizzard PC and console games that they have a license for. Cloud providers will also be offered a free license to stream these games in EU markets, with these licenses being automatic. In effect, it means that consumers will have a right to stream Activision Blizzard games they’ve purchased or subscribed to for any cloud game on any device using any operating system. An inclusive setup that, on the face of it, sounds like a reasonable solution to most of the concerns Sony has levied at Microsoft over this deal for quite some time, but UK regulators are set to drag this never-ending saga out further.
The UK’s Competition and Markets Authority blocked the deal less than a month ago, citing concerns over the cloud gaming markets. This obviously infuriated both sides of the deal, with Microsoft suggesting that the move would discourage more investment in the UK and stunt technological innovation in the process, while Activision Blizzard went one step further and stated that it was reevaluating its growth strategy for the UK market. An Activision Blizzard spokesperson said: “The CMA’s report contradicts the ambitions of the UK to become an attractive country to build technology businesses. We will work aggressively with Microsoft to reverse this appeal. The report’s conclusions are a disservice to UK citizens, who face increasingly dire economic prospects. We will reassess our growth plans for the UK. Global innovators large and small will take note that – despite all its rhetoric – the UK is clearly closed for business.” In fairness to the CMA’s decision, their concerns over the deal do have merit even after Microsoft has thrown the kitchen sink at it, making concessions where they deem necessary and doing everything they can to convince regulators they are not in this for making any Triple-A titles exclusive. However, the Authority’s decision to veto the deal has added yet more laborious work to the timeframe, and with Microsoft having announced their intent to buy Activision Blizzard nearly 500 days ago now, patience is wearing thin from all parties involved. Microsoft has already expressed an intent to appeal the UK’s ruling, but it will likely take months before the process is complete. The EU’s decision may help boost Microsoft’s chances of getting this giant deal over the line eventually, but the company still faces a massive battle in the UK before it gets there.