The UK — which blocked the Microsoft-Activison deal — is ready to negotiate. Here’s what happens next

Britain's contention regulator, the staunchest hostile of Microsoft's $69 cardinal acquisition of gaming elephantine Activision Blizzard, level retired blocked the woody successful April.

It appears the U.K. Competitions and Markets Authority whitethorn person present had a alteration of heart.

After a U.S. justice connected Tuesday denied the the Federal Trade Commission's motion for a preliminary injunction to halt Microsoft from completing its acquisition of Activision Blizzard, the U.K. CMA said it was acceptable to spell backmost to the negotiations array with the Redmond giant.

But what assurances tin Microsoft connection to the CMA, aft erstwhile attempts astatine concessions person failed?

The U.K. CMA efficiently blocked the acquisition successful April, saying the woody raises contention concerns successful the nascent unreality gaming market. Like different regulators, the CMA is acrophobic that Microsoft could instrumentality Activision games and marque them exclusive to its ain platforms.

Cloud gaming is simply a exertion that enables gamers to entree games via distant servers — efficaciously streaming a crippled similar you would a movie on Netflix. The exertion is inactive successful its infancy, but Microsoft is betting large connected it becoming a mainstream mode of playing games.

"Allowing Microsoft to instrumentality specified a beardown presumption successful the unreality gaming marketplace conscionable arsenic it begins to turn rapidly would hazard undermining the innovation that is important to the improvement of these opportunities," the CMA said successful April.

The CMA had been aggressively pushing for Microsoft not to acquisition Activision — and its determination to unbend its stance has travel arsenic a astonishment to many.

In its statement, the CMA suggested it would unfastened up negotiations with Microsoft to see proposals to resoluteness the dispute.

"We basal acceptable to see immoderate proposals from Microsoft to restructure the transaction successful a mode that would code the concerns acceptable retired successful our Final Report," a CMA spokesperson told CNBC via email connected Tuesday.

"In bid to beryllium capable to prioritise enactment connected these proposals, Microsoft and Activision person agreed with the CMA that a enactment of litigation successful the UK would beryllium successful the nationalist involvement and each parties person made a associated submission to the Competition Appeal Tribunal to this effect."

The regulator could person gone up and progressed with ineligible enactment successful the courts. However, this would person been a lengthy and costly process, and whitethorn person been peculiarly bruising for the watchdog, if it were to suffer the case.

Alex Haffner, a contention lawyer astatine instrumentality steadfast Fladgate, told CNBC that the setback to the FTC fundamentally near the CMA "exposed to being the lone regulator that has really blocked the deal."

"Why did they bash this? You mightiness telephone it look saving, you mightiness besides telephone it pragmatic, fixed the circumstances," helium said.

"It's been backed into a country and publically said it's announced a enactment of the entreaty to negociate with Microsoft," Haffner added. "You adhd that, unneurotic with the governmental machinations of each of the vigor the CMA's got. It's beauteous nailed connected [that] it's going to negociate immoderate benignant of colony with the parties."

The CMA, Microsoft and Activision present look acceptable to hash retired a imaginable solution to the regulator's concerns to get a woody implicit the line.

Microsoft could question to supply further commitments to the regulator. It's not yet wide astatine this signifier what those pledges could look like, but Haffner said they would request to beryllium "proportionate to the concerns raised."

"There volition beryllium an aggravated play of negotiations connected some sides they request to get it done quickly," Haffner told CNBC. "We'll get it done successful a week oregon so, I'd say."

Microsoft has a July 18 deadline to implicit the deal.

Microsoft has already offered concessions to the U.K. regulator which were rejected.

One of the remedies involves Microsoft making definite games disposable connected different platforms for a defined play of time. For example, Microsoft said successful February that it would bring Xbox PC games to Nvidia's unreality gaming service. The institution besides signed a 10-year woody with rival Nintendo to bring Call of Duty to the Japanese firm's platforms the aforesaid time arsenic the crippled would go disposable connected the Xbox.

To the European Union regulators which approved the woody successful May, Microsoft said it would connection royalty-free licenses to unreality gaming platforms to watercourse Activision games, if a user has purchased them. 

But the CMA has rejected akin concessions connected the ground that they would beryllium hard to show and enforce, and the rapidly-fluctuating quality of the nascent unreality gaming assemblage means specified arsenic a remedy whitethorn not instrumentality into relationship changes successful the unreality market.

So Microsoft volition request to instrumentality different effort astatine a licensing concession.

Prior to softening its stance successful its April ruling, the CMA successful February gave a announcement of imaginable solutions to Microsoft. One of those was for Microsoft to merchantability its concern associated with the fashionable Call of Duty game. Other remedies included a divestiture of immoderate of the Activision Blizzard business.

Microsoft President Brad Smith told CNBC successful February that helium didn't spot a "feasible path" to merchantability disconnected Call of Duty.

But a divestiture of immoderate benignant could beryllium connected the cards, according to Dan Ives, expert astatine Wedbush Securities. Ives said successful a enactment connected Wednesday that Microsoft could carve retired its Game Pass subscription work successful the U.K. to fulfill the CMA.

Game Pass is Microsoft's subscription work connected the Xbox console and PC, which gives users entree to hundreds of games.