Microsoft has submitted a new deal to the Competition and Markets Authority (CMA) after the regulator blocked a merger with Activision Blizzard.

The original deal was blocked by the UK watchdog after it found the merger could impact innovation and choice in cloud gaming.

Microsoft and Activision Blizzard have now agreed a new, restructured deal, which will be investigated by the CMA.

The deadline for a Phase 1 decision on the new deal is set for 18 October 2023.

Last month reports suggested that Microsoft had reached an agreement with the CMA to revise the terms of its proposed $69 billion merger.

While the EU gave the green light for the merger, the CMA blocked the merger in April citing concerns that the deal would “alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.”

The authority also went on to restrict the companies from "acquiring an interest in one another" in the future.

Microsoft has said that its new deal will address concerns set out in the CMA's final report earlier this year. In particular, the deal aims to provide an independent third-party content supplier, Ubisoft, with the ability to supply Activision’s gaming content to all cloud gaming service providers.

Ubisoft will be able to license out Activision’s content under different business models, including subscription services.

The deal also proposes that Ubisoft would have the ability to require Microsoft to provide versions of games on operating systems other than Windows.

"As part of this new deal, Activision’s cloud streaming rights outside of the EEA will be sold to a rival, Ubisoft, who will be able to license out Activision’s content to any cloud gaming provider," said Sarah Cardell, chief executive, CMA. "This will allow gamers to access Activision’s games in different ways, including through cloud-based multigame subscription services. We will now consider this deal under a new Phase 1 investigation."

But the chief executive warned that the organisation's new investigation is "not a green light".

"We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments," she continued. "Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.

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