British competition regulators gave preliminary approval Friday to Microsoft鈥檚 restructured $69 billion deal to buy video game maker Activision Blizzard, easing a final global hurdle that paves the way for one of the largest tech transactions in history to go through.
The Competition and Markets Authority said the revamped proposal 鈥渟ubstantially addresses previous concerns鈥� about in the fast-growing cloud gaming market, which frees players from buying expensive consoles and gaming computers by streaming to tablets, phones and other devices.
The updated offer 鈥渙pens the door to the deal being cleared,鈥� the watchdog said, though there are lingering concerns. that the watchdog provisionally decided will resolve those issues, and regulators are now getting feedback from 鈥渋nterested parties鈥� before making a final decision.
The announcement shows the U.K. watchdog is close to reversing its from taking over the maker of hit gaming franchises like Call of Duty and World of Warcraft.
鈥淭he CMA鈥檚 position has been consistent throughout 鈥� this merger could only go ahead if competition, innovation and choice in cloud gaming was preserved,鈥� CEO Sarah Cardell said. 鈥淚n response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns.鈥�
Since the deal was announced in January 2022, Microsoft has secured approvals from antitrust authorities covering more than 40 countries. Crucially, it got a after agreeing to allow users and cloud gaming platforms to stream its titles without paying royalties for 10 years.
But it hit roadblocks in the U.S. and Britain, where regulators feared Microsoft鈥檚 purchase of Activision would harm competition and hurt gamers, especially for those using Sony鈥檚 PlayStation console instead of Microsoft鈥檚 Xbox.
The U.S. Federal Trade Commission opposed the transaction but , effectively clearing the path for it to proceed. The FTC鈥檚 appeal of that decision is still in progress.
The companies agreed to for the deal to close to mid-October to try to overcome the British regulator鈥檚 objections. The CMA then put its original decision on hold and into the revamped proposal.
Microsoft President Brad Smith said the company is 鈥渆ncouraged by this positive development鈥� in the .
鈥淲e presented solutions that we believe fully address the CMA鈥檚 remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline,鈥� he said.
Activision CEO Bobby Kotick said in a message to employees posted online that the preliminary approval was a 鈥渁 significant milestone for the merger and a testament to our solutions-oriented work with regulators.鈥�
Under the restructured deal, Microsoft will sell off cloud streaming rights outside of the EU and three other European countries for all current and new Activision games released over the next 15 years to French game studio Ubisoft Entertainment.
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