Microsoft and Activision Blizzard are exploring potential avenues to address concerns raised by the UK’s Competition and Markets Authority (CMA) regarding their proposed merger. According to reports, both companies are considering relinquishing certain aspects of their cloud gaming business in the UK in an effort to appease regulators and facilitate the approval of the deal.
Sources indicate that Microsoft and Activision Blizzard may divest their “cloud-based market rights for games in the UK” to a telecommunications, gaming, or internet-based computing company, or even a private equity firm. This strategic move aims to address the CMA’s reservations about the acquisition, which was initially vetoed in April 2023. However, the CMA expressed openness to reviewing revised terms for the merger, necessitating a fresh investigation that could prolong the approval process.
The CMA cited concerns that the proposed deal would have a negative impact on the burgeoning cloud gaming market, potentially stifling innovation and limiting consumer choice in the UK. Microsoft has appealed the CMA’s decision, and a court date has been scheduled for July 28, though some analysts speculate that the company may have negotiated a separate agreement to close the deal before the resolution of their legal dispute.
With the July 18 deadline looming, failure to finalize the merger by this date would oblige Xbox to pay a significant penalty of $3 billion to Activision Blizzard, thereby opening up the possibility of renegotiating the terms of the merger between the two companies.
gfpods.com 
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