Microsoft would sell cloud gaming rights in the UK to convince the CMA

Microsoft is on the verge of completing the acquisition of Activision Blizzard following its victory against the United States Federal Trade Commission (FTC). However, the goal of both companies is to have their merger approved smoothly worldwide, especially in key markets. It seems they will have to make concessions to the UK regulator to put an end to the drama.

Microsoft and Activision might sell cloud gaming rights in the UK

According to a report by Bloomberg, Microsoft and Activision Blizzard are considering a radical decision in the UK to convince the Competition and Markets Authority (CMA) of the region to approve their merger. They are contemplating selling rights and the cloud gaming business to a third party, which could be a telecommunications company, an internet company, or even a gaming industry player. This buyer would take charge of operating everything related to the Microsoft and Activision gaming business involving the cloud, thus fulfilling the regulator's main requirement.

Bloomberg reports that Microsoft is considering selling UK cloud-gaming rights to a telecommunications, gaming, or internet company to allow the Activision deal to close with the CMA. I'd imagine EE is in the picture here https://t.co/VYpNy7f8kO

— Tom Warren (@tomwarren) July 14, 2023

When the CMA officially blocked the merger, they expressed concern about the position and advantage Microsoft would gain in the emerging cloud gaming sector if the Activision Blizzard acquisition were allowed. At the same time, the British regulator stated that their remedies are not as lenient as those of the European Union, and in their case, they opt for divestment, meaning the sale of certain parts of both companies' businesses. In that regard, they even proposed selling Call of Duty or Blizzard Entertainment, but it seems that another option would be to sell the cloud gaming business only in the UK.

Following the FTC's defeat, the CMA backed down from its attempt to block the merger, and together with Microsoft and Activision, they notified the Competition Appeal Tribunal of the suspension of litigation in search of an agreement that satisfies all parties involved. It appears that the only way for Microsoft to convince the CMA and complete the acquisition of Activision Blizzard is by making a radical decision, as the regulator warned that if no agreement is reached, the review process for the acquisition will have to start over.

Time is running out as the deadline to finalize the merger between Microsoft and Activision Blizzard is July 18. Both companies are working to resolve the situation in the UK before that day. So far, given the restriction imposed in the United States to prevent the completion of the acquisition before midnight on July 14, expectations are set for Monday, the 17th, as the day when the merger will be finalized. The stock market is already preparing for this as Activision Blizzard was temporarily delisted from NASDAQ, and it is said that trading of its shares will resume on that day.

Stay tuned here on LEVEL UP.

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