Microsoft Offers New Deal to Buy Activision Blizzard To UK Regulators

The FTC wasn’t even the final boss.

Microsoft’s attempt to buy game studio Activision Blizzard for a record-breaking $69 billion has been hampered by regulators, including FTC Chair Lina Khan, but now it can practically taste victory. Only one thing stands in Microsoft’s way — the UK.

Jolly Good Show, Old Sport

The UK’s Competition and Markets Authority declared in April that it was blocking Microsoft’s proposed takeover of Activision Blizzard, the company behind mega-hit franchises including Call of Duty and Diablo. It was an inauspicious start to Microsoft’s wooing of international regulators, but since then it’s managed to knock obstacles out of the way. The FTC’s attempt to kibosh the deal was dismissed by a federal judge, and the EU green-lit the deal.

Without the CMA’s sign-off though, the deal could still fall apart. In April, Microsoft took a pretty aggressive stance, with President Brad Smith hinting the company might favor Britain’s ex, the EU, for future business moves. Now Microsoft is trying to woo Britain back by allaying the CMA’s stated concerns that by buying Activision Blizzard, Microsoft would become disproportionately powerful in the nascent market of cloud gaming:

• Cloud gaming allows consumers to stream games onto their devices without needing particularly powerful computing power — think Netflix, but for games.
• Microsoft’s new deal would hand cloud streaming rights for all present and future Activision Blizzard games to Ubisoft, a France-based video game publisher famous for making the Assassin’s Creed franchise, for 15 years.

Tiago Reis, an analyst at gaming analytics firm Newzoo, told The Daily Upside the deal gives Microsoft a good chance of convincing regulators while also making it a convenient quick buck. “It was always Xbox’s intent to license cloud versions of games to various services,” said Reis. “With Ubisoft now shouldering the cloud streaming for Activision Blizzard titles, Xbox ensures its original strategy is intact while securing a one-off payment and a share of revenue based on the games’ performance on those services. This is a clever way to participate in the revenue upside while staying compliant, thereby satisfying the CMA’s concerns and smoothening the acquisition process.”

However, the deal might still have some unintended consequences, as the EU said on Tuesday it will examine whether the restructured deal alters any of the concessions Microsoft already offered European regulators. It’s an old-fashioned game of regulator whack-a-mole.

It’s-A-Not-A-Me-Anymore: The gaming world suffered a grievous loss this week. On Monday, Nintendo announced Charles Martinet, the voice of Mario since 1996, is retiring from the role. Don’t worry, Martinet isn’t going far, as Nintendo said he’s taking on a new job as a “Mario Ambassador.”