US software giant Microsoft has submitted a heavily amended version of its proposed takeover of US video game publisher Activision Blizzard to the UK Competition Authority (CMA), hoping to finally get the green light after a refusal in April . The digital giant plans in particular to make significant sales of online gaming rights, which will be sold to French company Ubisoft.
The CMA, which had blocked the operation at the end of April, fearing that it would reduce competition too much in the market for dematerialized games, specifies “it has opened a new phase 1 investigation into a restructured agreement by Microsoft to buy Activision”.
The British competition policeman confirms Tuesday, August 22 in its press release its decision to block the original merger, an operation which was valued at 69 billion dollars and which was to give birth to the third player in the sector in terms of turnover. business, behind the Chinese Tencent and Sony.
Ubisoft involved in the agreement
“As part of the new agreement, Microsoft will not purchase the streaming rights to all current Activision games” or “games that will be broadcast for the next 15 years (except in the next 15 years). European Economic Area)”, details the CMA. “These rights will be sold to competing French publisher Ubisoft, “prior to Microsoft’s acquisition of Activision,” she continues. The latter will thus have the right to sell licenses on Activision content to “any provider of dematerialized games”.
Ubisoft’s stock soared more than 7% on the Paris Stock Exchange on Tuesday morning. “This will allow players to access Activision games in different ways,” said Sarah Cardell, CEO of CMA, which clarifies that the review of the new version is “not a green light”.
“Our objective has not changed, namely that any future decision on this new wording of the agreement must ensure that the growing market for online games will continue to benefit from competition that promotes choice and innovation,” she argues.
A step forward for Microsoft
The CMA’s decision sparked the ire of Microsoft, with its chairman Brad Smith decrying “the darkest day in (Microsoft’s) four decades in Britain” and adding that it was shaking the US software giant’s “confidence”. in “future opportunities to develop a tech business in Britain”.
Microsoft had challenged in court the blocking of its takeover of Activision Blizzard by the CMA but had finally agreed in early July to suspend the legal proceedings to find common ground with the regulator, which was to go through new proposals from the American group.
The American competition authority, the FTC, for its part suspended in July the procedure before the administrative justice that it had initiated in December against the acquisition of Activision Blizzard as it was initially envisaged. The European Commission for its part approved this takeover in May.
“This potentially portends to stakeholders another lengthy process (…) but in reality it is unlikely that Microsoft would have embarked on this new offering without a high degree of certainty that it will ultimately be cleared. of the CMA,” remarks Alex Haffner of the law firm Fladgate. The new deadline for a decision on the preliminary inquiry is October 18.
Hargreaves Lansdown analyst Susannah Streeter notes that the required divestiture to Ubisoft aims to prevent Microsoft “from making hit games like ‘Call of Duty’ exclusively available on its own platforms”, and calls the new version a “significant compromise”. . “With other barriers to the transaction having been removed in the European Union and the United States, Microsoft sees the finish line, although there is no guarantee that another obstacle will not arise” , she adds.
Activision Blizzard owns several phenomenal titles, played by tens of millions of people, from “Call of Duty” to “Candy Crush”. Tencent and Sony reign over the industry in Asia and beyond thanks in particular to Riot Games, the publisher of the global success “League of Legends”, for the Chinese giant, PlayStation consoles for the Japanese firm.
