Microsoft Closes Activision Blizzard Acquisition After Receiving U.K. Approval

UPDATE AT END: Microsoft has closed a $68.7 billion deal to acquire game developer Activision Blizzard after receiving approval from the U.K.’s Competition and Markets Authority (CMA) earlier today.

How did we get here? In January 2022, Microsoft agreed to buy Activision Blizzard in the biggest proposed deal in video game history. Activision Blizzard is one of the world’s most popular video game developers and owns hit franchises such as Call of Duty, Diablo, Overwatch, World of Warcraft, and Candy Crush. In April of this year, the CMA blocked the deal, arguing that, as written, it would hinder competition in the cloud gaming space. In the U.S., the FTC had its own objections, but an attempt to halt the merger was dismissed back in July, making the CMA’s approval the last hurdle to finalizing the acquisition.

Why did the CMA change its decision? When it blocked the deal in April, the CMA provided a list of its most significant concerns and gave Microsoft a chance to respond. According to the CMA, approval has now been granted because Microsoft agreed to sell Activision Blizzard’s cloud streaming rights for all current and new titles released to Ubisoft. The change means that Ubisoft can offer Activision Blizzard’s games across all platforms and ensures that cloud gaming providers will be able to use non-Windows operating systems for the games.

What are they saying? CMA chief executive Sarah Cardell explained the decision, saying:

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. As cloud gaming grows, this intervention will ensure people get more competitive prices, better services, and more choice. We are the only competition agency globally to have delivered this outcome.

Microsoft vice-chair and president Brad Smith posted to Twitter to say:

We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.

In an employee email sent out on Friday, Activision Blizzard CEO Bobby Kotick said:

We now have all regulatory approvals necessary to close and we look forward to bringing joy and connection to even more players around the world… We’re excited for our next chapter together with Microsoft and the endless possibilities it creates for you and for our players.

After the deal was finalized, Microsoft put out a release which read:

Together, we’ll create new worlds and stories, bring favorite games to more places so more players can join in, and we’ll engage with and delight players in new, innovative ways in the places they love to play including mobile, cloud streaming and more.

UPDATE: After sharing news of the acquisition’s closing, Activision Blizzard CEO Bobby Kotick announced that he will leave the company at the end of 2023. Kotick will receive over $375 million from the deal. In a statement, he said:

I have long said that I am fully committed to helping with the transition. Phil has asked me to stay on as CEO of ABK, reporting to him, and we have agreed that I will do that through the end of 2023. We both look forward to working together on a smooth integration for our teams and players.