Twenty months after it was first announced, Microsoft’s unprecedented deal to buy Call of Duty and Candy Crush publisher Activision Blizzard for $69 billion appears to have beaten its final boss. The UK’s Competition and Markets Authority revealed on Friday that it has provisionally approved the tech giant’s latest version of the acquisition, which includes convoluted carve-outs for cloud gaming rights. After tons of dramatic twists and turns, the biggest gaming merger ever looks like it’s finally happening.

“This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft,” Colin Raftery, the CMA’s senior director of mergers, said in a press release. “With additional protections to make sure that the deal is properly implemented, this will maintain the structure of the market, enabling open competition to continue to shape the development of cloud gaming in the years to come, and giving UK gamers the opportunity to access Activision’s games in many different ways, including through cloud-based multigame subscription services.”

The CMA had previously rejected the deal over concerns that acquiring popular gaming franchises like Call of Duty, Overwatch, Diablo, and more would give Microsoft a monopoly in the cloud gaming space. Microsoft started hinting that it might get around the CMA’s decision by just removing Activision games from the UK entirely, and later sent out rumblings that it was preparing to close the deal even without permission from the Federal Trade Commission in the U.S. which had sued it over anti-trust concerns.

The FTC then sued for an injunction to block the deal, leading to an extradordiary multi-day trial in federal court full of testimony by gaming executives from Xbox, PlayStation, Bethesda, and other companies that included an unusual level of behind-the-scenes looks into the normally hyper secretive gaming industry.

How Microsoft saved the Activision Blizzard deal

The judge in the case ended up siding with Microsoft, however, paving the way for it to close the deal in the U.S. and eventually forcing the CMA back into negotiations on a reversal of its previous rejection. According to reporting by Bloomberg, it was all part of a bluffing strategy by Microsoft to ultimately save the deal.

To placate UK regulators, Microsoft has now agreed to sell cloud gaming rights for Activision Blizzard’s games to Ubisoft. While it can still pay to stream hits like Modern Warfare II and Diablo IV on services like Game Pass, Ubisoft will have final say for the next 15 years, keeping Microsoft from having exclusive control. That complicated carve-out only applies to the UK, however, and regulators said today that their last demand is for Microsoft to offer some sort of enforcement mechanism so that the CMA can check to make sure it is adhering to the terms of the agreement. A final decision for approval will arrive by October 6.

“The CMA’s position has been consistent throughout–this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved,” Sarah Cardell, CEO of the CMA, said in a press release. “In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns. It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”

Notably, the CMA’s provisional approval comes just one day after UK treasury head, Jeremy Hunt, met with gaming companies in California. The government agency released photographs from the event on social media today. They show Activision Blizzard CEO Bobby Kotick as one of the executives in attendance, and the one seated closest to Hunt. The longtime Call of Duty boss threatened earlier this year that the UK would become “death valley” if it did not approve the sale. Kotick is estimated to earn a windfall of $390 million once the deal goes through. That’s over 20 times the $18 million settlement Activision Blizzard agreed to pay the Equal Employment and Opportunity Commission following a multi-year investigation into sexual harassment and discrimination at the company.

Update 10/13/2023 8:51 a.m. ET: The CMA announced its final approval for the deal today, saying it was satisfied that Microsoft’s new cloud agreement with Ubisoft mitigates the threat of a monopoly in the cloud gaming space. The regulators blamed the tech giant for the process taking so long.

“ 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,” said CMA chief executive Sarah Cardell. “Dragging out proceedings in this way only wastes time and money.”

Microsoft now has the greenlight to close the Activision deal on or before its new October 18 deadline.

When speculation rife that Microsoft expects to finalize its purchase of Activision Blizzard this week, and COD: Modern Warfare III out in a month, it seems people have been wondering when Activision’s games will start appearing on Microsoft’s Game Pass. According to a tweet from Activision Blizzard, it should be some time next year.

The entire debacle of Microsoft’s attempts to buy Activision Blizzard feels it has been clogging up gaming news for years. In fact, it all started only last January, but followed hot on the heels of months of grim and gruesome reporting on the heinous working conditions at the developer’s various studios. This week could see that enormous, shitty chapter come to a close. Presumably so another enormous, shitty chapter can start.

But still, more games on Game Pass!

“As we continue to work toward regulatory approval of the Microsoft deal,” said Activision Blizzard on X, “we’ve been getting some questions whether our upcoming and recently launched games will be available via Game Pass.”

The Verge reported on Friday that Microsoft is getting ready to close the $68.7 billion deal, with October 13 thought to be the Big Day. Of course, this is all being held back by the UK Competition and Markets Authority (CMA), which is the one international regulator that managed to decisively block the deal. However, being the UK’s CMA, it did it in the most cack-handed way, blathering on about unfair market control of cloud gaming, or some-such abstract technicality.

This complete whiff, entirely ignoring the concerns of, you know, Microsoft forming an actual monopoly, ensured a pathway for the two corporations to renegotiate arrangements such that it would avert the CMA’s peculiar strategy, and a couple of weeks ago it was provisionally stated it had succeeded. We should be finding out this week if the CMA is entirely satisfied, and given that’s likely to be the case, signet-ring-bearing hands will shake and overpriced Champagne shall be popped, as a bunch of extraordinarily rich people stand to get even richer.

Read More: Hold Onto Your Butts, Microsoft’s Massive Activision Blizzard Deal Is Finally Happening

“While we do not have plans to put Modern Warfare III or Diablo IV into Game Pass this year,” continues that Activision tweet, “once the deal closes, we expect to start working with Xbox to bring our titles to more players around the world.” So when? “And we anticipate that we would begin adding games into Game Pass sometime in the course of next year.”

It’s oddly slow, if anything. They’ll be the same company, and they’ve known they would been the same company for the last 20 months, so it seems strange that it’ll take another few months before Microsoft will be hosting what will suddenly become first-party games on its own streaming service.

There’s one small cloud hanging over their grey-suited celebrations: the FTC still has an appear in with the Ninth Circuit Court of Appeals, and that decision won’t appear until December. Should it succeed, it would then become about trying to undo the already sealed deal, which would be a whole other level of difficult, and no one surely believes the FTC has the teeth or the fight in it to win.

So, the industry shrinks yet again, with less competition, fewer major publishers attempting to outsell each other, and so less choice and worse prices for the gaming public. It doesn’t seem like the games industry can be far away from the monstrous and idiotic situation of the music industry, in the control of the Big Four record labels. It certainly seems unlikely that any regulatory bodies will be able to stop it, either way.

But you know, you can get next year’s COD on your subscription, so shhhhh.

The video game industry just got a lot smaller. The long and winding saga of Microsoft’s $69 billion purchase of Activision Blizzard has finally come to a close with the companies announcing the completed merger today following one last greenlight from regulators in the UK. Call of Duty is now part of Xbox and the tech giant has now surpassed Sony as the second biggest gaming company in the world, as gaming’s big march toward corporate consolidation continues.

In addition to the blockbuster military shooter, Activision Blizzard produces Overwatch 2, Diablo IV, and World of Warcraft. The acquisition will provide a raft of big games for Microsoft’s growing Xbox Game Pass subscription service, as well as make it a massive player on mobile with some of the biggest smartphone games in the world in Candy Crush and Call of Duty mobile. Microsoft signed a 10-year deal to keep Call of Duty on PlayStation, but has reserved the right to make other Activision Blizzard franchises exclusive to its Xbox platforms going forward.

The deal will also effectively expand Microsoft’s gaming business by roughly 10,000 employees. It’s not yet clear how many of them will remain, either due to redundancy layoffs or attrition of senior talent and executive level staff. Activision Blizzard CEO Bobby Kotick wrote in an email to staff today that he will stay on at the company reporting to Microsoft Gaming CEO Phil Spencer through the end of 2023.

Microsoft agreed to union neutrality with the Communication Workers of America last year, and starting 60 days from now Activision Blizzard employees will be able to get recognition of a union with majority support through a simple card check. Prior to joining Microsoft, the company had fought unionization efforts and recieved a number of labor complaints filed with the National Labor Relations Board.

Microsoft and Activision Blizzard first announced the groundbreaking merger back in January 2022. Filings with the Securities and Exchange Commission revealed that Spencer approached Kotick about the deal after the publisher’s stock price collapsed following major game delays and continued reports of past sexual harassment and misconduct by some of its employees.

A July 20, 2021 lawsuit by the California Civil Rights Department alleged widespread sexual harassment and discrimination within Activision Blizzard. Then a bombshell Wall Street Journal report on November 17, 2021 claimed that Kotick was aware of multiple past sexual misconduct lawsuits against the company but failed to report them to its board of directors. Activision has called the report misleading and is currently fighting the Civil Rights Department’s lawsuit in court.

However, a day after The Wall Street Journal’s report was published, Spencer emailed staff within Microsoft that he was “evaluating all aspects” of Xbox’s relationship with Activision Blizzard. The next day, he approached Kotick about buying the embattled company. Those talks eventually culminated in a deal to buy the Call of Duty publisher for $95 a share, a 45 percent premium over what the company was worth following the sexual misconduct reports and game production delays.

The Wall Street Journal and Bloomberg both reported at the time that Kotick was expected to resign after the deal closed, allowing him a graceful exit from the company he spent 30 years leading while the California lawsuit is still ongoing. Kotick also stands to make nearly $400 million from the sale via his stock holdings, over 20 times the $18 million settlement Activision Blizzard paid to the Equal Employment and Opportunity Commission over sexual discrimination allegations last year.

Microsoft and Activision Blizzard had originally planned to close the deal by last July, but battles with regulators in the UK and U.S. almost killed it off. The Federal Trade Commission attempted to block the merger in federal court over the summer, leading to a week-long trial that ended up revealing an unprecedented amount of behind-the-scenes info about Xbox, Sony, and other gaming companies, including leaked plans for upcoming consoles and private emails between top brass.

The FTC’s legal case ultimately failed, however, paving the way for Microsoft to address remaining reservations with the UK’s Competition and Markets Authority. As part of a reworked plan to win approval, Microsoft agreed to sell cloud gaming rights for Activision Blizzard games in the UK to Assassin’s Creed publisher Ubisoft, preventing it from being able to withhold streaming licenses for hits like Call of Duty and Overwatch from competitors like Sony. While Microsoft ultimately prevailed with regulators, the unexpected level of scrutiny resulted in a number of compromises and an unusual level of transparency that both companies may not have been counting on when the deal was first announced.

With the acquisition fights done, the new challenge for Microsoft will be how to integrate the massive publisher into its existing gaming business. That process will take years as well, and no doubt include its own set of twists and turns. Microsoft’s purchase of Bethesda Softworks’ parent company ZeniMax in 2020 doubled the size of Xbox Game Studios. Activision Blizzard is almost five times bigger. Its next big game, Call of Duty Modern Warfare 3 (Amazon), arrives on November 2, giving Microsoft the biggest release of the holiday season.

Longtime Activision Blizzard CEO, Bobby Kotick, is almost gone, but not quite yet. Nearly two years after over 1,000 of his employees called on the controversial executive to resign, Microsoft Gaming CEO Phil Spencer confirmed that Kotick will remain the head of the Call of Duty publisher until the end of 2023, to help with the transition as it begins officially merging with the tech giant.

“Bobby Kotick has agreed to remain in his role through the end of 2023, reporting directly to me, to ensure a smooth and seamless integration,” Spencer wrote in an October 13 email to staff. “We look forward to working together as a unified team and we will share more updates on our new organizational structure in the coming months.”

“I have long said that I am fully committed to helping with the transition,” Kotick wrote in his own email to Activision Blizzard employees. “Phil has asked me to stay on as CEO of ABK, reporting to him, and we have agreed that I will do that through the end of 2023. We both look forward to working together on a smooth integration for our teams and players.”

Kotick’s leadership at Activision has often been contentious, especially following a 2021 lawsuit by regulators in the state of California alledging a history of sexual harassment and discrimation at the company. Activision Blizzard has denied those claims and continues to fight the lawsuit in court. But the allegations and subsquent reporting became a catalyst for hundreds of employees at the company to speak out against the CEO, and even begin unionizing at some studios.

A November 2021 investigation by The Wall Street Journal alleged that Kotick was aware of serious sexual misconduct incidents at the company and did not always report them to the board of directors. Activision called the reporting misleading, but in the wake of the story gaming executives—including Sony’s Jim Ryan, Nintendo of America’s Doug Bowser, and Spencer himself—informed staff they were concerned about the allegations. The report also led over 1,000 Activision Blizzard employees to call for Kotick to resign amid large scale walkouts.

Instead, Microsoft swooped in to begin acqusition neogtiations. According to reporting by Bloomberg and The Wall Street Journal, the mounting calls for accountability and unease among some members of the board of directors were a factor in convincing Kotick to move ahead with selling Activision Blizzard. It’s a deal that now looks set to provide him with a nearly $400 million windfall in the sale of company stock.

Even prior to the sexual harassment and discrimation allegations against the company, which spurred Kotick to announce a series of initiatives to make Activision Blizzard a more safe and inclusive workplace, developers working under him have often been critical of the executive’s vision for aggressively monetizing franchises with sequels and pricey in-game items. The annual production of blockbuster Call of Duty games has been blamed for poor working conditions among quality assurance testers, and extended periods of overtime “crunch” across the teams making them.

“We see the progress that they’re making that was pretty fundamental to us deciding to go forward here,” Spencer said of Activision’s plans to improve workplace culture in the wake of the California lawsuit, back when the merger was first announced in January 2022. More recently, Kotick had controversial comedian and former late night host James Corden come to Activision to interview him earlier this week. He told the Cats star that the company had a “magic” culture, and it was that magic that first attracted Microsoft to the acquisition in the first place.