Microsoft has completed its $69bn (£56bn) takeover of Call of Duty-maker Activision Blizzard in the gaming industry’s biggest ever deal.
It comes as Microsoft, which owns the Xbox gaming console, was given the green light for the global deal after UK regulators approved it.
The Competition and Markets Authority said its concerns had been addressed, after it blocked the original bid.
Microsoft’s Phil Spencer said securing Activision was “incredible”.
Following the announcement of the deal, Activision Blizzard CEO Bobby Kotick confirmed in a letter to staff that he would step down at the end of 2023.
“I have long said that I am fully committed to helping with the transition,” he said. “[Phil Spencer and I] both look forward to working together on a smooth integration for our teams and players.”
Despite concerns from rivals such as PlayStation-maker Sony, and regulators over competition in the gaming industry, Mr Spencer, who is chief executive of Microsoft Gaming, sought to reassure gamers.
“Whether you play on Xbox, PlayStation, Nintendo, PC or mobile, you are welcome here – and will remain welcome, even if Xbox isn’t where you play your favorite franchise,” Mr Spencer said in a statement following the takeover.
“Because when everyone plays, we all win. We believe our news today will unlock a world of possibilities for more ways to play.”
‘Preserve prices’
Under the re-worked deal, Microsoft has handed the rights to distribute Activision’s games on consoles and PCs over the cloud to French video game publisher Ubisoft.
But while a concession has been made, Microsoft will now control games such as Call of Duty, World of Warcraft, and Candy Crush that will provide the firm with huge revenues.
The CMA said the revised deal would “preserve competitive prices” in the gaming industry and provide more choice and better services.
But despite approving the takeover, the watchdog criticised Microsoft’s conduct over the near-two year battle.
“Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA,” said chief executive Sarah Cardell.
“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.”
After the competition watchdog blocked the takeover earlier this year, Microsoft’s president Brad Smith hit out at the CMA’s decision, which it said was “bad for Britain” and contradicted “the ambitions of the UK to become an attractive country to build technology businesses”.
It has proved controversial and received a mixed response from regulators around the world, but has already been passed by regulators in the European Union. The US competition watchdog recently saw its attempt to pause the purchase rejected by the courts.
But the CMA’s Ms Cardell said with the sale of Activision’s cloud streaming rights to Ubisoft, which makes Assassin’s Creed, “we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market”.
“We were clear that that deal couldn’t go ahead, because it would have harmed competition, and that would have been bad for UK gamers,” she added.
“We take our decisions free from political influence and we won’t be swayed by corporate lobbying.”
‘Final hurdle crossed’
Mr Smith said Microsoft was “grateful for the CMA’s thorough review and decision”.
Microsoft is paying cash for Activision at a premium price of $95 per share, meaning Mr Kotick, Activision’s outgoing chief executive, is set for a $400m payday, with chairman Brian Kelly earning $100m, based on the shares they own.
Under the restructured agreement, Microsoft has agreed to transfer the rights to stream Activision games from the cloud to Ubisoft for 15 years outside the European Economic Area (EEA). This includes EU countries as well as Iceland, Liechtenstein and Norway.
After the 15 years are up, Ubisoft will no longer hold the cloud gaming rights for Activision’s content, but it is understood the regulator believes the time span will see rivals become established for the cloud gaming market to be more competitive.
Microsoft is hopeful the takeover will boost demand for its Xbox console and enable the tech firm to add more titles to its Xbox Game Pass service, where members pay a subscription fee to access a catalogue of games from the cloud – either by downloading or by streaming.
The deal with Activision also means Microsoft will own its studio solely purposed for mobile games, with hopes of expanding on the successes of titles such as Candy Crush.
The takeover further cements Microsoft as a video game giant and could catapult it ahead of Nintendo to become the third-biggest player in the industry behind Sony, the owner of the PlayStation console, and market leader Tencent.
Sony strongly opposed this deal over concerns that big Activision titles like Call of Duty could become Xbox exclusives over time.
The PlayStation currently outsells Microsoft’s Xbox but like all entertainment platforms, the key to success is access to the best content, though Sony is also not averse to buying up successful studios.
‘More choice’
Nicky Stewart, a consultant and former commercial director of cloud services provider UK Cloud, said the decision to approve the takeover was “great news for gamers”.
“[It will lead to] more choice, more innovation, better value and improved gaming experiences and a healthy, competitive market,” said Ms Stewart, who is also a former head of ICT at the Cabinet Office government department.
“The CMA has forced Microsoft to make concessions in the UK that other regulators have not. This is good news for the UK’s nascent gaming industry.”
Sniffer dogs in Ecuador have found 6.23 tonnes of cocaine hidden in a banana shipment, police say.
The dogs alerted their handlers, who seized 5,630 parcels filled with a white substance that later tested positive for cocaine.
The shipment was destined for Germany, officials said, and would have been worth $224m (£173m) had it reached its destination.
Five people had been arrested following the discovery, according to the prosecutor-general’s office.
Police said they had found the massive cocaine haul during a routine inspection of container stored at Posorja deepwater port south-west of Ecuador’s largest city, Guayaquil.
The cocaine parcels had been hidden beneath crates of bananas destined for export.
One of those arrested in connection to the drug discovery was a representative of the export company responsible for the shipment, whom prosecutors said had been present at the inspection and gave officials the names of the four other suspects.
They include the managers of the banana plantation where the cocaine is suspected to have been added to the fruit shipment, as well as the driver who took the container to the port.
Ecuador has become a major transit country for cocaine produced in neighbouring Peru and Colombia, with transnational criminal gangs using Ecuador’s ports to ship the drug to Europe and the US.
Last year, Ecuadorean security forces seized more than 200 tonnes of drugs, most of it cocaine. Only the US and Colombia seized more drugs in 2023.
Gangs have caused a wave of violent crime in Ecuador, leading President Daniel Noboa to declare a state of emergency and deploy tens of thousands of police officers and soldiers in an effort to combat them.
These security forces have stopped large amounts of cocaine from being shipped to Europe.
In January, officers found the largest stash ever to be seized in Ecuador – 22 tonnes of cocaine – buried in a pig farm.
However, extortion, kidnappings and murders remain high in the Andean country.
Thailand has expanded its visa-free entry scheme to 93 countries and territories as it seeks to revitalize its tourism industry.
Visitors can stay in the South-East Asian nation for up to 60 days under the new scheme that took effect on Monday,
Previously, passport holders from 57 countries were allowed to enter without a visa.
Tourism is a key pillar of the Thai economy, but it has not fully recovered from the pandemic.
Thailand recorded 17.5 million foreign tourists arrivals in the first six months of 2024, up 35% from the same period last year, according to official data. However, the numbers pale in comparison to pre-pandemic levels.
Most of the visitors were from China, Malaysia and India.
Tourism revenue during the same period came in at 858 billion baht ($23.6bn; £18.3bn), less than a quarter of the government’s target.
Millions of tourists flock to Thailand every year for its golden temples, white sand beaches, picturesque mountains and vibrant night life.
The revised visa-free rules are part of a broader plan to boost tourism.
Also on Monday, Thailand introduced a new five-year visa for remote workers, that allows holders to stay for up to 180 days each year.
The country will also allow visiting students, who earn a bachelor’s degree or higher in Thailand, to stay for one year after graduation to find a job or travel.
In June, authorities announced an extension of a waiver on hoteliers’ operating fees for two more years. They also scrapped a proposed tourism fee for visitors flying into the country.
However some stakeholders are concerned that the country’s infrastructure may not be able to keep up with travellers’ demands.
“If more people are coming, it means the country as a whole… has to prepare our resources to welcome them,” said Kantapong Thananuangroj, president of the Thai Tourism Promotion Association.
“If not, [the tourists] may not be impressed with the experience they have in Thailand and we may not get a second chance,” he said.
Chamnan Srisawat, president of the Tourism Council of Thailand, said he foresees a “bottleneck in air traffic as the incoming flights may not increase in time to catch up with the demands of the travellers”.
Some people have also raised safety concerns after rumours that tourists have been kidnapped and sent across the border to work in scam centres in Myanmar or Cambodia.
The prospective new owner of Royal Mail has said he will not walk away from the requirement to deliver letters throughout the UK six days a week, as long as he is running the service.
“As long as I’m alive, I completely exclude this,” Czech billionaire Daniel Kretinsky told the BBC.
Mr Kretinsky has had a £3.6bn offer for Royal Mail accepted by its board.
Shareholders are expected to approve the deal in the coming months, but the government also has a say over whether it goes ahead.
Currently the Universal Service Obligation (USO) requires Royal Mail to deliver letters six days a week throughout the country for the same price. But questions have been raised over whether the service could be reduced in the future.
In an exclusive interview with the BBC, Mr Kretinsky also said he would be willing to share profits with employees, if given the go-ahead to buy the group.
However, he appeared to reject the idea of employees having a stake in Royal Mail, which unions have called for in exchange for their support.
The Royal Mail board agreed a £3.6bn takeover offer from Mr Kretinsky in May for the 500-year-old organisation, which employs more than 150,000 people. Including assumed debts, the offer is worth £5bn.
But because Royal Mail is a nationally important company, the government has the power to scrutinise and potentially block the deal.
As well as keeping the new government on side, Mr Kretinsky also faces the task of convincing postal unions that the proposed deal will benefit employees.
The USO is a potential sticking point for both the government and unions.
Royal Mail is required by law to deliver letters six days a week and parcels five days a week to every address in the UK for a fixed price.
How well this has actually been working in practice is a different matter. Ten years ago, 92% of first class post arrived on time. By the end of last year it was down to 74%, according to the regulator Ofcom.
Last year the regulator fined Royal Mail £5.6m for failing to meet its delivery targets.
Royal Mail has been pushing for this obligation to be watered down. It wants to cut second class letter deliveries to every other weekday, saying this will save £300m, and lead to “fewer than 1,000” voluntary redundancies.
‘Unconditional commitment’
Mr Kretinsky has committed in writing to honouring the USO, but only for five years.
And after that, in theory, the new owners could just walk away from it.
However, Mr Kretinsky told the BBC: “As long as I’m alive, I completely exclude this, and I’m sure that anybody that would be my successor would absolutely understand this.
“I say this as an absolutely clear, unconditional commitment: Royal Mail is going to be the provider of Universal Service Obligation in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around.”
Mr Kretinsky added that the written five-year commitment was “the longest commitment that has ever been offered in a situation like this”.
Another potential stumbling block for the deal, however, is how the company will be structured.
Unions would like to see the company renationalised, but Dave Ward, general secretary of the Communication Workers Union (CWU), told the BBC that would be “difficult in the current political and economic environment”.
Instead, what the CWU is pushing for is “a different model of ownership” – that is, where the employees part-own the business.
To get its support for the takeover, the union wants employees to share ownership of the company, along with other concessions including board representation for workers.
It says profit sharing is “not going to be enough to deliver our support and the support of the workforce”.
If the union doesn’t get what it wants, it won’t rule out industrial action, Mr Ward said. Its members went on strike in 2022 and 2023.
Although Mr Kretinsky said he is “very open” to profit sharing, he is not in favour of shared ownership.
“I don’t think the ownership stake is the right model,” he said. “The logic is: share of profit, yes, [but an] ownership structure creates a lot of complexity.
“For instance, what happens if the employee leaves? He has shares, he is leaving, he is not working for the company, he [still] needs remunerating.”
Mr Kretinsky said he didn’t want to create “some anonymous structure” but instead “remunerate the people who are working for the company, and creating value for the company”.
The union is also concerned about job losses and changes to the terms and conditions of postal workers’ contracts.
Mr Kretinsky has guaranteed no compulsory redundancies or changes in terms and conditions but only until 2025.
“If we are more successful, and we have more parcels to be delivered, we need not less people, but we need more people,” he said. “So really, job cuts are not part of our plan at all.”
He said if the management, union and employees work together, “we will be successful”.
Another concern is the potential break-up of the business.
The profit for Royal Mail’s parent company last year was entirely generated by its German and Canadian logistics and parcels business, GLS. Royal Mail itself made a loss.
Mr Kretinsky has promised not to split off GLS or load the parentcompany with excessive debt, although borrowings will rise if the deal goes through.
But he has a way to go to convince the CWU.
“I can’t think of any other country in the world that would just just hand over its entire postal service to an overseas equity investor,” Mr Ward of the CWU said.
However, Mr Kretinsky said that the postal unions “do understand that we are on the same ship, and that we need this ship to be successful, and that if we are there, we don’t have any real problems to deal with, because the sky is blue, and it’s blue for everybody.”
The union cannot stop this deal but the government can block it under the National Security and Investment Act.
Business Secretary Jonathan Reynolds has said he will scrutinise the assurances and guarantees given and called on Mr Kretinsky to work constructively with the unions.
Mr Kretinsky may say that he and the unions are ultimately on the same ship but, as things stand, they are not on the same page.
Who is Daniel Kretinsky?
Daniel Kretinsky started his career as a lawyer in his hometown of Brno, before moving to Prague.
He then made serious money in Central and Eastern European energy interests.
This includes Eustream, which transports Russian gas via pipelines that run through Ukraine, the Czech Republic and Slovakia.
He then diversified into other investments, including an almost 10% stake in UK supermarket chain Sainsbury’s and a 27% share in Premier League club West Ham United.
The Czech businessman is worth about £6bn, according to reports.