Call of Duty maker Activision to be bought by Microsoft

Microsoft’s revised offer to buy Call of Duty-maker Activision Blizzard has been approved by UK regulators.

The Competition Markets Authority (CMA) said the updated bid had addressed concerns, after it blocked the original $69bn (£59bn) deal in April.

Microsoft will hand the rights to distribute Activision’s games on consoles and PCs over the cloud to French video game publisher Ubisoft.

Despite approving the deal, however, the CMA criticised Microsoft.

After the competition watchdog blocked the takeover in April, Microsoft’s president Brad Smith said it was “bad for Britain”.

On Friday, CMA chief executive Sarah Cardell said: “Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA.

“Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.”

The CMA said the revised deal would “preserve competitive prices” in the gaming industry and provide more choice and better services.

Prior to the approval, the deal, which makes Microsoft the owner of Call of Duty, World of Warcraft, Overwatch and Candy Crush, could not be finalised globally.

It has proved controversial and received a mixed response from regulators around the world, but has already been passed by regulators in the European Union. The US competition watchdog recently saw its attempt to pause the purchase rejected by the courts.

But the CMA’s Ms Cardell said with the sale of Activision’s cloud streaming rights to Ubisoft, “we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market”.

Mr Smith said Microsoft was “grateful for the CMA’s thorough review and decision”.

He said the “final regulatory hurdle” had been crossed for the tech giant to complete the deal, while a spokesman for Activision Blizzard said the approved deal was “great news”.

Under the restructured agreement, Microsoft has agreed to transfer the rights to stream Activision games from the cloud to Ubisoft, a video games publisher, for 15 years outside the European Economic Area.

Microsoft remains hopeful the takeover will boost demand for its Xbox console and enable the tech firm to add more titles to its Xbox Game Pass streaming service, where members pay a subscription fee to access a catalogue of games from the cloud.

The deal marks a huge shift for the games industry. It further cements Microsoft as a video game giant, much to the consternation of its main rival Sony, owner of the PlayStation console.

Sony has strongly opposed this deal over concerns that big Activision titles like Call of Duty could become Xbox exclusives over time.

The PlayStation currently outsells Microsoft’s Xbox but like all entertainment platforms, the key to success is access to the best content.

Sony is also not averse to buying up successful studios. But Activision Blizzard is in a league of its own, and Microsoft knows that.

Following eight years in development and much anticipation, another large studio called Bethesda, which is owned by Microsoft launched its new game Starfield in 2023 – but only on Xbox and PC.

After the CMA rejected Microsoft’s first attempt to acquire Activision, the two companies hit out at the watchdog, saying its initial decision had contradicted the “the ambitions of the UK to become an attractive country to build technology businesses”.

Ms Cardell defended the CMA’s actions, telling the BBC’s Today programme that the watchdog “stood our ground” and was prepared to defend the decision in court before Microsoft “came forward with a major concession”.

“When we take these decisions, whether it’s this decision on Microsoft or any other decision, we are looking to protect competition in the UK,” she said.

“That benefits consumers and that benefits businesses and it benefits the economy because competition is key to drive investment and innovation and growth.”