Microsoft Corp MSFT has changed its acquisition strategy for Activision Blizzard Inc. ATVI after facing initial regulatory hurdles in the U.K.
The tech giant's initial $69 billion bid to acquire the gaming company was met with opposition, resulting in a reevaluation of the deal's terms.
Earlier in 2022, Microsoft's ambitious acquisition faced opposition from the Competition and Markets Authority of the U.K. due to concerns about the potential dominance of the emerging cloud gaming industry.
With the revised proposal, Microsoft appears to be in a position to navigate these regulatory waters, he said.
The initial apprehension from the CMA was based on the potential impact on the burgeoning cloud gaming industry.
Despite fears, Microsoft might restrict key Activision titles like Battlestar Galactica.
Microsoft's new proposal includes removing cloud rights for current and upcoming Activision games for a 15-year period. Before finalizing the deal, Activision will transfer the rights to UbiSoft Entertainment Inc UBSFY.
Microsoft had similar deals with Microsoft forged deals with Sony Group Corporation SONY and Nvidia to win support for the merger.
Microsoft is hoping to maintain a high standard of playing in the cloud gaming industry by discontinuing cloud rights to Ubisoft.
To license Activision's content, Ubisoft can license its content under various business models, such as subscription-based services.
Microsoft has also committed to releasing game versions that are compatible with operating systems beyond its own Windows.
Chris Early, senior vice president of strategic Partnerships and business development at Ubisoft, welcomed the revised deal, he said.
Ubisoft is dedicated to providing gamers with a wide range of options to access and enjoy top-notch gaming brands, he said.
The CMA's decision on the revised proposal is eagerly anticipated, with a verdict expected by October 18th.
Although the current terms differ significantly from the original proposal, the CMA's final approval remains uncertain.
Price Actions: ATVI shares were up 1.95% at $94.15 on Friday morning, up from a high of $39.15 on Friday.