The Microsoft-Activation takeover of Blizzard has been approved by the British regulator CMA

Britain’s biggest competition watchdog gave the green light to Microsoft’s planned $69 billion takeover of game company Activision Blizzard on Friday, removing the last major hurdle to completing the deal.

The Competition and Markets Authority said it had approved Microsoft’s purchase of Activision, but without the cloud gaming rights.

“The new agreement will prevent Microsoft from increasing competition in cloud gaming at a time when that market is emerging, while maintaining competitive prices and services for UK cloud gaming customers,” the regulator said in a statement on Friday.

The Capital Markets Authority was the latest regulator to close the deal. Microsoft should now be able to complete the acquisition.

The decision represents a significant departure from the Capital Markets Authority, a staunch critic of the acquisition, which effectively blocked the deal earlier this year over concerns that the acquisition would stifle competition in the emerging cloud gaming market.

Microsoft first proposed acquiring Activision in January 2022, but has since faced regulatory challenges in the US, Europe and the UK.

In July, the capital markets regulator said it would consider a restructured takeover of Microsoft to address its concerns. Microsoft has made a series of concessions centered around the sale of cloud rights to Activision games to French game maker Ubisoft Entertainment.

“This will enable Ubisoft to deliver Activision content across any business model, including multiple game subscription services. “This will help cloud gaming providers to be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency,” the market authority said. Rs.

Regulators around the world feared that the acquisition would reduce competition in the gaming market, particularly in cloud gaming. Microsoft could also take original Activision games like Call of Duty and make them exclusive to Xbox and other Microsoft platforms, officials said.

Cloud gaming is considered the industry’s next frontier, offering subscription services that allow people to stream games the same way they stream movies or series on Netflix. It can also eliminate the need for expensive consoles and allow users to play games on PCs, mobile phones and TVs instead.

Specifically, when it blocked the takeover in April, the British regulator argued that completing the deal would give Microsoft a stronger position in the emerging cloud gaming market.

European Union authorities were the first major regulator to approve the deal in May after Microsoft gave the EU an exemption.

At the time, the CMA said it stood by its original decision to block the deal because giving the EU an exemption would allow Microsoft to “set the terms of this market for the next decade”.

Meanwhile, in the US, the Federal Trade Commission is embroiled in a legal battle with Microsoft to overturn Activision’s takeover. But in July, a judge blocked the FTC’s attempt to do so, paving the way for the agreement to be implemented in the United States.

Just hours later, the capital markets regulator said it was “ready to consider any proposal from Microsoft to restructure the deal” and to address the regulator’s concerns.

In August, Microsoft waived capital markets authorities in a second attempt to close the deal.

As part of the restructuring, Microsoft will not acquire cloud rights to Activision’s existing PC and console games or new games published by Activision for the next 15 years. Instead, these rights will be transferred to Ubisoft Entertainment prior to Microsoft’s acquisition of Activision, according to the CMA.

“By selling Activision’s cloud streaming rights to Ubisoft, we have ensured that Microsoft can no longer dominate this important and rapidly evolving market,” CMA CEO Sarah Cardell said in a statement.

“As cloud gaming grows, this intervention will ensure that people get more competitive pricing, better service and more choice. We are the only competition authority in the world to achieve this result.”

U.K. In approving the deal, the capital markets regulator, which has become increasingly aggressive in investigating large mergers, fired a divisive shot at Microsoft and criticized the tech giant’s negotiating tactics.

“Companies and their advisors should be in no doubt that the tactics used by Microsoft are not the right way to deal with CMA,” Cardell said.

“Microsoft had the opportunity to restructure during our initial investigation, but instead insisted on multiple measures that we said would not work. Delaying action like this only wastes time and money.”

The CMA was the last major regulator to block Activision’s takeover.

Microsoft CEO Brad Smith said on X, formerly known as Twitter, that he was “grateful” for the CMA’s review and decision.

“We have now cleared the final regulatory hurdle to complete this acquisition, which we believe will benefit gamers and the gaming industry around the world,” Smith said.

Activision Blizzard CEO Bobby Kotick told employees in an email that he’s “excited about our next chapter with Microsoft and the endless possibilities it holds for you and our players.”

During regulatory scrutiny, Microsoft tried to show regulators and its closest competitors that it would not monopolize games.

The US tech giant signed a deal in February to bring Xbox games to Nvidia’s cloud gaming service and a 10-year deal to bring Call of Duty to Nintendo gamers on the same day as Xbox “with full functionality and content parity”. Microsoft signed a deal with its biggest rival Sony in July to bring Call of Duty to the Japanese company’s PlayStation gaming console.