UK regulators have cleared Microsoft's $69 billion acquisition of Activision Blizzard, the company behind Call of Duty, Overwatch, and World of Warcraft, reversing its earlier decision to block the deal, which is one of the largest tech transactions in history.
The Competition and Markets Authority (CMA) had originally blocked the deal over concerns Microsoft would gain too much control of the cloud gaming market.
But in August, Microsoft agreed to transfer the rights to stream Activision games from the cloud to French gaming company Ubisoft Entertainment for 15 years outside the European Economic Area.
That was enough to placate concerns at the CMA, which then signalled it was prepared to clear the deal.
'No way to engage with the CMA'
“With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market,” Sarah Cardell, chief executive of the CMA, said on Friday.
“As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice.”
Ms Cardell also said that the way Microsoft had behaved during the process was less than ideal and that “the tactics employed by Microsoft are no way to engage with the CMA”.
“Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.”
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said while that “slap on the wrist isn’t ideal, it won’t stop Microsoft from pushing forwards into this exciting, and very lucrative, new chapter”.
Now that the deal has been officially cleared by the CMA, Microsoft will avoid paying Activision the $4.5 billion penalty it might have incurred if the sale had fallen through.
Microsoft president Brad Smith said the company was grateful for the “thorough review and decision”.
“We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide,” he said.
Activision chief executive Bobby Kotick also welcomed the news: “We look forward to becoming part of the Xbox Team.”
Rivals' worries
The deal was first announced in January 2022, and it was cleared by competition and anti-trust regulators in more than 40 countries.
The 27-country European Union gave the deal the green light, but there was resistance in the UK and the US.
British and American regulators worried it would stifle competition in the video game industry, and Microsoft rival Sony feared it would limit PlayStation gamers’ access to Call of Duty, Activision’s long-running military shooter series.
The US Federal Trade Commission (FTC) lost a court attempt to pause the deal so that its in-house judge could review it.
However, the FTC has not given up. It appealed against the decision and last month filed notice of its plan to resume that trial, meaning that the regulator still intends to challenge the deal, even after it is closed.
Analysts feel while the deal is unlikely to be derailed by the FTC, some small tweaks may be needed in the future, depending on the legal outcome.
The deal is a game-changer in the industry, and market watchers say Sony worries that future blockbuster games might only be available on Microsoft's Xbox.
The statistics website Statista projects that the video gaming industry will earn revenues of $334 billion this year and that by 2027 there will be 3.1 billion gamers worldwide.
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Alaan%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Parthi%20Duraisamy%20and%20Karun%20Kurien%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20FinTech%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20%247%20million%20raised%20in%20total%20%E2%80%94%20%242.5%20million%20in%20a%20seed%20round%20and%20%244.5%20million%20in%20a%20pre-series%20A%20round%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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The years Ramadan fell in May
UAE currency: the story behind the money in your pockets
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Hili 2: Unesco World Heritage site
The site is part of the Hili archaeological park in Al Ain. Excavations there have proved the existence of the earliest known agricultural communities in modern-day UAE. Some date to the Bronze Age but Hili 2 is an Iron Age site. The Iron Age witnessed the development of the falaj, a network of channels that funnelled water from natural springs in the area. Wells allowed settlements to be established, but falaj meant they could grow and thrive. Unesco, the UN's cultural body, awarded Al Ain's sites - including Hili 2 - world heritage status in 2011. Now the most recent dig at the site has revealed even more about the skilled people that lived and worked there.
Correspondents
By Tim Murphy
(Grove Press)
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Review: Tomb Raider
Dir: Roar Uthaug
Starring: Alicia Vikander, Dominic West, Daniel Wu, Walter Goggins
two stars
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Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
T20 World Cup Qualifier
October 18 – November 2
Opening fixtures
Friday, October 18
ICC Academy: 10am, Scotland v Singapore, 2.10pm, Netherlands v Kenya
Zayed Cricket Stadium: 2.10pm, Hong Kong v Ireland, 7.30pm, Oman v UAE
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Ashfaq Ahmed, Rameez Shahzad, Darius D’Silva, Mohammed Usman, Mohammed Boota, Zawar Farid, Ghulam Shabber, Junaid Siddique, Sultan Ahmed, Imran Haider, Waheed Ahmed, Chirag Suri, Zahoor Khan
Players out: Mohammed Naveed, Shaiman Anwar, Qadeer Ahmed
Players in: Junaid Siddique, Darius D’Silva, Waheed Ahmed
