One Thing Still Stands In The Way Of Xbox’s Activision Takeover
Gaming

One Thing Still Stands In The Way Of Xbox’s Activision Takeover


Photo: Anadolu Agency (Getty Images)

Microsoft’s deal to buy Activision Blizzard for $69 billion is closer than ever to becoming a reality after the companies defeated the Federal Trade Commission in court this week. While the FTC can still appeal, all eyes now turn back to regulators in the UK, that last thorn in the tech giant’s side as it seeks to dramatically alter the trajectory of Xbox.

The UK’s Competition and Markets Authority (CMA) blocked the deal earlier this year over concerns that it would lead Microsoft to dominate the growing market for cloud gaming subscription services. The companies immediately appealed, and now both sides have reopened negotiations on potential “remedies” to assuage regulators’ antitrust concerns following the FTC’s recent failure to get a district judge to approve a preliminary injunction. That decision in the U.S. seems to have fast-tracked a resolution in the UK as well.

But if and how Microsoft will ultimately convince the CMA to approve its purchase of Call of Duty, World of Warcraft, Diablo, and other massive gaming franchises remains to be seen. The CMA is now threatening that any changes to Microsoft’s terms for the deal in the UK could require an entirely new investigation which would presumably take several months beyond the current July 18 deadline for the acquisition.

“Whilst merging parties don’t have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal, which can lead to a new merger investigation,” the CMA said in a statement to The Verge. It continued:

Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis. These discussions remain at an early stage and the nature and timing of next steps will be determined in due course. While both parties have requested a pause in Microsoft’s appeal to allow these discussions to take place, the CMA decision set out in its final report still stands.

That certainly doesn’t sound like the CMA is working on a quick fix for the deal. Or it could just be playing hardball. As previously reported by Axios, one possible way for Microsoft to appease regulators in the UK would be to have a “carve out” for Call of Duty on Game Pass and xCloud. Instead of making the hit shooter series available on those services in that market, it could agree to pull it from the UK version of them. That would potentially address the CMA’s core concerns about Call of Duty being used to give Microsoft a monopoly in cloud gaming. Now the question is whether the company can offer something like that without starting the entire review process over from scratch.

Microsoft executives had previously suggested that any more delays at this juncture would essentially kill the Activision merger. They had also hinted at the possibility that they might be willing to push forward with the deal without the CMA’s approval and simply pull Activision Blizzard games from the UK market entirely. Both would be drastic measures, even for one of the largest tech mergers in history.

        





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