After July 18, Microsoft and game publisher Activision Blizzard could in principle end acquisition talks, according to the acquisition agreement between the two companies. Over objections from Britain’s competition watchdog CMA, the deal won’t be completed in time, but it “still looks good for Microsoft,” says competition expert Friso Postojn.

Nineteen months ago it became known that Microsoft plans to acquire the large game company Activison Blizzard. Microsoft was willing to pay $69 billion for it. The deadline for closing the acquisition was set for July 18, 2023. The first competition watchdog to consider the deal, Britain’s Capital Markets Authority, immediately applied the brakes. Players will have fewer choices after the acquisition, which is bad for the competition in the game industry.

“Microsoft has a strong position in cloud gaming services and the evidence that the CMA was able to review indicates that it would make commercial sense for Microsoft to offer Activeions games exclusively on its own cloud gaming service (Xbox Cloud Gaming, editor), the Capital Markets Authority said earlier this year.

In the lanes, the decisions of European and American competition authorities will put pressure on the British. So Microsoft has good cards on its hands’

Friso Postoin, University of Leuven

British coach

Microsoft did not agree to this analysis and was assisted in doing so in recent months by the European Competition Authority and eventually also by the United States Competition Authority. However, the CMA’s red traffic light is a deciding factor right now. The UK is an important market for Microsoft’s gaming business. In addition, Microsoft also faces a heavy fine if it ignores the British advice. The country can fine CEO Satya Nadella’s company up to 5 percent of its global turnover.

“The CMA is a very important authority on a global scale. Practically speaking, it has never happened that a global acquisition was still able to move forward after being banned by the CMA,” Friso Bostoin said earlier. He is an expert in competition law at KU Leuven.

the pressure

So Microsoft is still negotiating with CMA. Positive advice from other competition watchers gives the company momentum. 39 countries gave their blessing. according to bloomberg Thus, the pressure is in full swing, despite the fact that the July 18th deadline has been missed.

At the beginning of this week, the company behind Xbox put the warranty on paper as popular Call of dutyActivision Blizzard games continue to appear on competing consoles. Postwin thinks this is a good move, but the British mainly play cloud games. “An agreement could be reached if Microsoft demonstrated its willingness to offer Activision Blizzard games on a cloud gaming platform other than Xbox Cloud Gaming in the UK. This would require consultation with a third party.” Bostoen mentions Nvidia and its GeForce Now service as a possible partner.

Good maps

On August 29, it should become clear whether Microsoft’s guarantees are sufficient for the money market agreement. According to Postwin, this is more than enough time for at least both parties to broadly agree on an agreement. The opportunities for Microsoft are well appreciated. The UK court recently accepted Microsoft’s appeal Catch Developed, in line with expectations, as it always follows the logic of its competition observer. Microsoft is now in talks with CMA again, so a lot is still possible. In the lanes, the decisions of European and American competition authorities will put pressure on the British. So Microsoft has good cards on its hands.

Not having a deadline has a consequence. Both companies have the right to renegotiate the financial details and other terms of the acquisition after July 18th. It is not yet known whether bottlenecks will arise between Microsoft and Activision Blizzard, but Bostoen certainly does not expect major problems. It is clear that most of Activision Blizzard’s shareholders are in favor of acquiring Microsoft. The playmaker’s stake has risen 25% in recent months as more countries accept the terms of the deal.