European Commission Approves Microsoft’s Acquisition of Activision Blizzard, Significantly Boosting Cloud Gaming
Microsoft’s acquisition of Activision Blizzard has received approval from the European Commission, marking a significant milestone in the completion of this historic deal.
According to an announcement on the European Commission’s website, the proposed acquisition has been approved under the EU Merger Regulation. The Commission’s assessment aligns with the findings of the UK’s Competition and Markets Authority (CMA), which determined that the deal would not harm the console market but could have implications for cloud gaming. However, the European Commission expressed satisfaction with the remedies proposed by Microsoft to address these concerns.
In fact, the European Commission found Microsoft’s solutions to be so effective that it anticipates the deal will bring about a “significant improvement” in the cloud gaming market. This stands in contrast to the CMA’s decision to block the deal last month.
To address concerns of potential monopolization, Microsoft has committed to a 10-year licensing agreement for consumers in the European Economic Area (EEA). This commitment ensures that Activision Blizzard games will not be exclusively tied to the Game Pass Ultimate or Xbox Cloud Gaming platform. Instead, any cloud streaming service will be granted a free license to offer Activision Blizzard games to EEA users on their platform. Additionally, EEA consumers will have the freedom to stream all current and future Activision Blizzard games they possess licenses for on any cloud gaming service of their choice.
The European Commission emphasized that Microsoft has no incentive to withhold Activision Blizzard games from Sony, as Sony is the leading distributor of console games worldwide. The Commission even stated that even if Microsoft were to make Activision games exclusive to Xbox, it would not significantly harm competition in the console market. The Commission’s reasoning is primarily focused on Europe, considering that Call of Duty, for instance, is less popular in the EEA compared to other regions.
Regarding cloud gaming, the Commission recognized that the popularity of Activision’s games could drive growth in the cloud game streaming market. Conversely, if Microsoft were to make Activision games exclusive to its own cloud game streaming service, Game Pass Ultimate, and withhold them from rival providers, it would hinder competition in game distribution via cloud streaming.
Microsoft’s proposed solutions to address these concerns were well-received by the European Commission, which acknowledged that they would empower millions of EEA consumers to stream Activision’s games on any cloud gaming service available in the EEA. The Commission believes that these commitments will bring significant benefits to competition and consumers, expanding the availability of Activision’s games to new platforms, including smaller EU players, and a broader range of devices.
This aligns with Microsoft’s longstanding message of making games more accessible and reaching as many players as possible. Microsoft President Brad Smith reiterated these points in a tweet, emphasizing that the European Commission’s requirements would enable millions of consumers worldwide to play Activision Blizzard games on any device of their choice.
While the European Commission’s approval is a notable step forward for Microsoft, there are still several hurdles to overcome, especially considering the CMA’s decision to block the deal. Microsoft is currently appealing the CMA’s decision, but the process is expected to take several months. Furthermore, the acquisition will undergo scrutiny from the United States’ Federal Trade Commission, which filed a lawsuit to block the deal in December 2022. A hearing for the case is scheduled for August 2 of this year.
