Microsoft has made a new offer to acquire Call of Duty developer Activision Blizzard in what would be the largest acquisition of its kind in the gaming industry.
Its initial $69 billion (£59 billion) transaction was thwarted by UK regulators.
President of Microsoft Brad Smith stated that the new offer is “substantially different” and should be accepted.
The Competition and Markets Authority (CMA) of the United Kingdom will review the transaction but stated, “This is not a green light.”
If the offer is accepted, Microsoft’s turbulent 18-month period will come to an end.
Since announcing plans to acquire Activision Blizzard in January of last year, the proposed merger has divided regulators around the globe, with some fearing that it could restrict gamers’ freedom of choice.
The CMA will decide on Microsoft’s revised bid by October 18; without its sanction, the transaction cannot proceed globally.
Microsoft anticipates that the merger will increase demand for its Xbox console and gaming subscription services.
Microsoft has consented to transfer for 15 years the rights to stream Activision games from the cloud to Ubisoft, a video game publisher.
Mr. Smith explained that “Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service – Xbox Cloud Gaming – or to exclusively control the licensing terms of Activision Blizzard games for rival services.”
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As the deadline approaches, the Call of Duty developer’s agreement is strengthened.
So far, the company has reported that its initial offer for Activision has been accepted in forty countries, including the European Union and China.
The US Federal Trade Commission continues to attempt to block the agreement in the United States, but has been repeatedly overruled by the courts.
However, the CMA barred the merger in April on the grounds that it would harm innovation and consumer choice in the rapidly expanding cloud gaming industry.
Mr. Smith reacted angrily to the decision, stating that it was “bad for Britain” and Microsoft’s “darkest day” in four decades of operation in the country.
It was also a setback for the British government, which aspires for the nation to become a technological juggernaut.
Microsoft stated that, under the revised terms, Ubisoft would provide Activision’s content to “all cloud gaming service providers, including Microsoft itself.”
Bobby Kotick, the CEO of Activision, stated that the transaction had been “a longer journey than anticipated,” but that “nothing materially changes” with the new offer.
“We will continue to work closely with Microsoft and the CMA throughout the remaining review process, and we are committed to help Microsoft clear any final hurdles as quickly as possible,” he continued.
Microsoft desires to acquire Activision in order to add more titles to Xbox Game Pass.
Members pay a subscription charge to access a cloud-based library of games.
However, competitors such as Sony have objected to the deal, fearing that Microsoft could prevent its own PlayStation business from accessing key games.
Modern Warfare 2, the latest installment in the Call of Duty franchise, grossed $1 billion in its opening weekend, and more than fifty percent of all copies sold in the United Kingdom were for PlayStation.
For the Microsoft-Activision merger to be successful, it must be approved by regulators in the United Kingdom, the United States, and the European Union.
If the new bid is accepted, the CMA would have a second chance to sanction the transaction, which would be a win for the CMA as well.
It has been criticized for preventing the merger.
The CMA’s chief executive officer, Sarah Cardell, stated that Microsoft’s new proposal was “substantially different from what had been presented previously.”
“We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments,” according to her.
“Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”
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