Microsoft Activision deal likely to clear in UK as October extension granted
Microsoft’s $69 billion acquisition of Activision Blizzard looks set to pass its last hurdle very soon, as extra time has been added for the CMA’s concerns to be ironed out.
Following news earlier this month that the FTC’s preliminary injunction against Microsoft’s attempt to welcome Activision Blizzard into the Xbox first-party family was rejected by a judge in a US Federal Court, all signs pointed towards the Microsoft Activision deal finally being passed through before its July 18, 2023, deadline (but without UK regulator approval). However, that deadline has since passed, and the deal still isn’t done. This is primarily because the CMA (Competitions and Markets Authority) remains the last obstacle that Microsoft hopes to remove, resolving its issues through the aid of an extension.
Up until a few days ago, the agreement between Microsoft and Activision Blizzard had stipulated that if the former couldn’t secure approval from worldwide regulators for the purchase, the latter could walk away and receive a $3 billion penalty fee from the Xbox maker in the process. That’s seemingly not an option being discussed, though, not with Head of Xbox Phil Spencer taking to Twitter to explain that the deadline has been extended while it works out a way to gain approval in the UK.
“Microsoft and Activision Blizzard have extended the merger agreement deadline to 10/18,” explained Spencer in a tweet yesterday, revealing that he and the leadership team now has until October 18, 2023, to lay the CMA’s fears to rest. “We're optimistic about getting this done, and excited about bringing more games to more players everywhere.”
Within reach
None of this guarantees that the Microsoft Activision deal will absolutely go through, of course, but three extra months to further work with the CMA on getting it passed on UK shores is a sure-fire indication of how Phil Spencer and co. are to seeing it through. The platform-holder has already demonstrated its willingness to be adaptable, signing a 10-year deal to keep Call of Duty on PlayStation and claiming that it wouldn’t lead to Xbox Game Pass price rises.
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The CMA’s main concerns over the Microsoft Activision deal weren’t related to AAA heavy-hitters like Call of Duty or Diablo at all, but rather the publisher’s dominance within the cloud gaming space. All Microsoft needs to do to alleviate these concerns is prove why welcoming in Activision Blizzard wouldn’t give it too much of an edge over what little competition in cloud gaming there currently is.
Should the CMA and Microsoft not reach an agreement by October, there’s no telling what might happen. That said, the most likely outcome is that Microsoft would push the deal through in everywhere but the UK, meaning that the Xbox business would have to operate slightly differently in Blighty compared to other territories like the USA and Canada. Here’s hoping we get an answer sooner rather than later.
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