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Microsoft’s $68.7 billion deal to acquire Activision Blizzard has been approved by UK regulators. The UK’s Competition and Markets Authority (CMA) has concluded that the deal can proceed after Microsoft recently restructured the deal to transfer cloud gaming rights for current and new Activision Blizzard games to Ubisoft. The decision clears the way for the deal to close now that the UK regulator has given the green light.

Press release from the CMA

In August this year Microsoft made a concession that would see Ubisoft, instead of Microsoft, buy Activision’s cloud gaming rights. This new deal will put the cloud streaming rights (outside the EEA) for all of Activision’s PC and console content produced over the next 15 years in the hands of a strong and independent competitor with ambitious plans to offer new ways of accessing that content.

As a result of this concession, the CMA agreed to look afresh at the deal and launched a new investigation in August. That investigation has completed today with the CMA clearing this narrower transaction.

The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers. It will allow Ubisoft to offer Activision’s content under any business model, including through multigame subscription services. It will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.

Sarah Cardell, Chief Executive of the CMA said:

The CMA is resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses. We take our decisions free from political influence and we won’t be swayed by corporate lobbying.  We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that. 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.  But 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.

Martin Coleman, Chair of the Independent Panel who reviewed the original Microsoft deal, said:

Cloud gaming is an important new way for gamers to access games and this deal could have seriously undermined its potential development. On that we, the European Commission and the US Federal Trade Commission are in full agreement. Where we differ is on how we solve that problem. We rejected a solution put to us by the parties which would have left Microsoft with too much control. We now have a new transaction in which the cloud distribution of Activision games, old and new, is taken away from Microsoft and put into the hands of Ubisoft, an independent party who is committed to widening access to the games. That’s better for competition, better for consumers and better for economic growth.

The decision 

In its original investigation, the CMA found Microsoft already held a strong position in relation to cloud gaming and blocked the deal. 

The sale of Activision’s cloud streaming rights to Ubisoft will prevent the distribution of important, popular content – including games such as Call of Duty, Overwatch, and World of Warcraft – from coming under the control of Microsoft in relation to cloud gaming. The restructured deal substantially addressed the concerns that the CMA had following its original investigation, which concluded earlier this year.   

The CMA did identify limited residual concerns with the new deal, but Microsoft gave undertakings that will ensure that the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA. 

The CMA consulted on these undertakings and is satisfied that this will provide the safety net needed to make sure this deal is properly implemented.

Microsoft has officially completed its acquisition of Activision Blizzard King first announced in January 2022.

Activision Blizzard CEO Bobby Kotick confirms on his message on the acquisition that he will step down as CEO at the end of 2023.

Message from Phil Spencer, Microsoft Gaming CEO

We love gaming. We play games, create games, and know first-hand how much gaming means to all of us as individuals and collectively, as a community. And today, we officially welcome Activision Blizzard and their teams to Xbox. They are the publishers of some of the most played and most beloved franchises in gaming history across console, PC and mobile. From Pitfall to Call of Duty, World of Warcraft to Overwatch, Candy Crush Saga to Farm Heroes Super Saga, their studios have pushed the boundaries of gaming for players around the world. I’ve long admired the work of Activision, Blizzard, and King, and the impact they’ve had on gaming, entertainment, and pop culture. Whether it was late nights spent playing the Diablo IV campaign with friends from start to finish, gathering the entire family in the rec room for our weekly Guitar Hero night, or going on an epic streak in Candy Crush, some of my most memorable gaming moments came from experiences their studios have created. It is incredible to welcome such legendary teams to Xbox. As one team, we’ll learn, innovate, and continue to deliver on our promise to bring the joy and community of gaming to more people. We’ll do this in a culture that strives to empower everyone to do their best work, where all people are welcome, and is centered on our ongoing commitment of Gaming for Everyone. We are intentional about inclusion in everything we do at Xbox—from our team to the products we make and the stories we tell, to the way our players interact and engage as a wider gaming community. Together, we’ll create new worlds and stories, bring your 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. Players have always been at the center of everything we do. And as we grow, we’ll continue to keep players at the heart of it all. We’ll continue to listen to your feedback, build a community where you can be yourself, where developers can do their best work, and continue to make really fun games. As promised, we will also continue to make more games available in more places—and that begins now by enabling cloud streaming providers and players to stream Activision Blizzard games in the European Economic Area, a commitment made to the European Commission. Today we start the work to bring beloved Activision, Blizzard, and King franchises to Game Pass and other platforms. We’ll share more about when you can expect to play in the coming months. We know you’re excited—and we are too. For the millions of fans who love Activision, Blizzard, and King games, we want you to know that today is a good day to play. You are the heart and soul of these franchises, and we are honored to have you as part of our community. Whether you play on Xbox, PlayStation, Nintendo, PC, or mobile, you are welcome here—and will remain welcome, even if Xbox isn’t where you play your favorite franchise. Because when everyone plays, we all win. We believe our news today will unlock a world of possibilities for more ways to play. Thank you for the ongoing support. We have so much more to come in the months ahead—I’m excited for the future and cannot wait to share it with you. —Phil Spencer

Message from Bobby Kotick, Activision Blizzard CEO

Team, Today marks a milestone in our company’s celebrated history. Combining with Microsoft will bring new resources and new opportunities to our extraordinary teams worldwide. It will also enable us to deliver more fun, more joy, and more connection to more players than ever before. This moment is possible because of your efforts over four decades to innovate, inspire, and achieve. When Brian Kelly and I began this journey in 1991, we intended to build a company that would have great impact and lasting value. Your tireless work and unwavering commitment to excellence enabled us to do just that. In the 1980s, we pioneered independent, third-party game development with Pitfall, River Raid, and Kaboom. In the 1990s, we united the world with online multiplayer games like MechWarrior, Warcraft, and StarCraft. In the 2000s, we introduced Call of Duty, which became one of the most successful entertainment franchises in history. We also introduced Guitar Hero and Tony Hawk’s Pro Skater, which entered popular culture in ways few videogames ever have. In the 2010s, we debuted Candy Crush Saga, which to date has been downloaded more than five billion times and contributed to our total worldwide players being fifty percent female. Your dedication is what makes it possible for us to continually push envelopes, break records, and delight players. Amid the uncertainty of the last 21 months, you’ve remained focused, as always, on serving our players and supporting each other. I have long said that I am fully committed to helping with the transition. Phil has asked me to stay on as CEO of Activision Blizzard King, 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. Brian and I couldn’t be more excited for the next chapter for Activision Blizzard King. We now join one of the most successful global companies, poised for unprecedented opportunities to connect the world through our games. As a part of Microsoft, we will be even better, together. —Bobby Kotick

Microsoft has announced plans to acquire Activision Blizzard for $68.7 billion.

The acquisition includes Activision Blizzard and all of its subsidiaries, such as Activision Publishing, Blizzard Entertainment, Beenox, Demonware, Digital Legends, High Moon Studios, Infinity Ward, King, Major League Gaming, Radical Entertainment, Raven Software, Sledgehammer Games, Toys for Bob, Treyarch, and every other team.

Franchises acquired in the acquisition include Call of Duty, Warcraft, Candy Crush, Tony Hawk’s Pro Skater, Overwatch, Spyro, Hearthstone, Guitar Hero, Crash Bandicoot, StarCraft, and many more.

Activision Blizzard will continue to operate independently until the transaction closes. Bobby Kotick will continue to serve as its CEO. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO of Microsoft Gaming.

Upon close, Microsoft will add “as many Activision Blizzard games as we can” to Xbox Game Pass, including new titles and back-catalog titles.

According to Spencer, “Activision Blizzard games are enjoyed on a variety of platforms and we plan to continue to support those communities moving forward.”

According to Bloomberg, citing “a person familiar with the company’s thinking,” Microsoft plans to keep making some of Activision’s games for PlayStation consoles, but will also keep some content exclusive to Xbox.

Press release

REDMOND, Wash. and Santa Monica, Calif. – Jan. 18, 2022 – With three billion people actively playing games today, and fueled by a new generation steeped in the joys of interactive entertainment, gaming is now the largest and fastest-growing form of entertainment. Today, Microsoft Corp. (Nasdaq: MSFT) announced plans to acquire Activision Blizzard Inc. (Nasdaq: ATVI), a leader in game development and interactive entertainment content publisher. This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse.

Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash. When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The planned acquisition includes iconic franchises from the Activision, Blizzard and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming. The company has studios around the word with nearly 10,000 employees.

Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” said Satya Nadella, chairman and CEO, Microsoft. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Phil Spencer, CEO, Microsoft Gaming. “Together we will build a future where people can play the games they want, virtually anywhere they want.”

“For more than 30 years our incredibly talented teams have created some of the most successful games,” said Bobby Kotick, CEO, Activision Blizzard. “The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”

Mobile is the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile. Through great teams and great technology, Microsoft and Activision Blizzard will empower players to enjoy the most-immersive franchises, like “Halo” and “Warcraft,” virtually anywhere they want. And with games like “Candy Crush,” Activision Blizzard´s mobile business represents a significant presence and opportunity for Microsoft in this fast-growing segment.

The acquisition also bolsters Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers. With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.

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