Microsoft’s $68.7 billion deal to acquire Activision Blizzard has been approved by EU regulators just weeks after UK regulators blocked the acquisition. The European Commission has concluded that the deal can go ahead thanks to Microsoft’s commitments regarding cloud gaming.
The EU ruled that Microsoft “would have no reason to refuse to distribute Activision’s games to Sony” and that “even if Microsoft were to decide to withdraw Activision’s games from the PlayStation, this would not significantly impair competition in the console market.” harm”. But EU regulators, like the UK, found the takeover could hurt competition around the distribution of PC and console games through cloud gaming services.
The European Commission has found solutions to keep the deal going through 10-year license agreements that Microsoft has offered to competitors. These include a free license for consumers in EU countries that allows them to stream all current and future Activision Blizzard PC and console games for which they have a license via “any cloud game streaming service of their choice”. Cloud providers are also offered a free license to stream these games in EU markets.
“Our decision is an important step in this direction, bringing Activision’s popular games to many more devices and consumers through cloud game streaming,” said Margrethe Vestager, executive VP responsible for competition policy at the European Commission. “Microsoft’s commitments will enable streaming of such games across all cloud game streaming services for the first time, increasing competition and growth opportunities.”
The EU’s decision to approve this mammoth deal comes less than a month after UK regulators blocked Microsoft’s plans. The UK’s Competition and Markets Authority (CMA) blocked the deal over concerns about the cloud gaming market, stating that the acquisition could lead to “less innovation and less choice for UK gamers in years to come”. Microsoft is appealing the decision.
Microsoft has been trying to allay regulators’ concerns about cloud gaming in recent months, with the deals winning over EU regulators but not the UK. The software giant signed cloud gaming deals with Boosteroid, Ubitus and Nvidia to run Xbox PC games on these rival cloud gaming services. A similar deal with Nintendo was announced in December. All of these 10-year deals also include access to Duty and other Activision Blizzard games if the deal is approved by regulators.
The CMA fears that Microsoft is in control Call from Dutj, OverexpectedAnd World of Warcraft would give it a major advantage over competitors in the cloud gaming market — which the regulator estimates Microsoft controls about 60 to 70 percent of global cloud gaming services.
Microsoft’s appeal in the UK is likely to take months to complete. Today’s EU decision may boost Microsoft’s chances of winning this massive deal, but the company still faces battles in the US and UK. Regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan and South Africa have also all approved the deal. China, South Korea, New Zealand and Australia are still eyeing the deal.
Microsoft’s next big hurdle is regulatory oversight closer to home. The Federal Trade Commission filed a lawsuit late last year to block the deal between Microsoft and Activision Blizzard, and the case is still in the document discovery stage. A witness hearing is now scheduled for August 2, so we are still months away from the outcome of the case.
