Microsoft submits new plan in £54bn takeover battle with UK competition watchdog

It came as the regulator confirmed on Tuesday that Microsoft’s original plan to buy the computer games company “cannot proceed”.

Under the new proposal, Microsoft would sell off its rights to offer games via the cloud for new or existing Activision PC or console games for the next 15 years outside the European Economic Area (EEA).

It will instead sell those rights to Ubisoft, a rival developer known for the Assassin’s Creed and Far Cry games series.

This is designed to ensure that gamers have access to Activision Blizzard’s games, even on consoles and computers not made by Microsoft.

The CMA will now launch a new probe into this deal, a so-called Phase 1 investigation.

CMA chief executive Sarah Cardell said: “The CMA has today confirmed that Microsoft’s acquisition of Activision, as originally proposed, cannot proceed.

“Separately, Microsoft has notified a new and restructured deal, which is substantially different from what was put on the table previously

“This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments.”

"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.”

Microsoft president Brad Smith said: “Under the restructured transaction, 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.”

It marks a new twist in the case, the biggest fight the CMA has taken on since gaining new post-Brexit powers.

At one point the case looked like as though it would only end after a court battle.

In January 2022 Microsoft announced that it planned to buy Activision Blizzard, the company behind the Call Of Duty and World Of Warcraft games, for a large sum.

When the UK was still an EU member, a deal of that size would have been assessed by regulators in Brussels.

However, after Brexit the CMA now has the power to investigate such deals itself.

Although both companies are American, they have significant businesses in the UK so their tie-up could have a significant impact on competition here.

The CMA is inviting comments from any interested party on the impact that the newly structured merger could have on competition in the UK market.