The European Commission, the executive body of the European Union, has approved Microsoft’s offer to buy game company Activision Blizzard for $ 69 billion in a historic decision.
The European Commission, the executive body of the European Union, has officially approved Microsoft’s bid to buy game company Activision Blizzard for $69 billion. The European Commission said Microsoft has offered solutions that address unfair competition concerns in the emerging cloud gaming space. These solutions from Microsoft are focused on allowing users to stream their purchased Activision games on any cloud streaming platform.
European Commission approves Microsoft-Activision deal
Regulators around the world are investigating whether Microsoft’s acquisition of Activision will disrupt competition in the console and cloud gaming market. One of the areas that the regulators questioned was whether Microsoft would take Activision games and keep them only on their own platforms from the US giant.
Activision is behind some of the biggest console and PC titles in the world, including the Call of Duty series, Overwatch, Diablo, and World of Warcraft. Therefore, this acquisition date is significant for the gaming industry.
The EU’s decision comes after the UK’s Competition and Markets Authority (CMA) blocked the deal last month over concerns it would reduce competition in the nascent cloud gaming market. CMA said that Microsoft could make important games like Activision’s Call of Duty exclusive to its cloud gaming platforms. Although CMA did not confirm the purchase, it still stated that the acquisition would not reduce competition in the console market.
Details of the decision
The EU Commission has similarly determined that the acquisition of Activision will not reduce competition in the console market, given Sony’s dominance of PlayStation. In addition, much of the EU’s investigation focused on cloud gaming. In the cloud gaming ecosystem, which is a very early market, games can be played on existing devices such as TVs, smartphones and laptops. For example, if a user buys a game online, they can play it on their device via a cloud gaming service.
But the key to success for cloud gaming also requires a large catalog of games that users can access immediately through a subscription service like Netflix. That’s part of the rationale behind Microsoft’s bid to take over Activision. The British regulator was concerned that Microsoft would gain a dominant position in cloud gaming before it matured into the market. Similar concerns were expressed in the Commission’s report. But differently, the Commission said that Microsoft has offered solutions to address competition concerns.
Therefore, consumers who have bought or will buy Activision games will be able to stream these games on any cloud gaming platform they want. Microsoft will also offer cloud gaming platforms royalty-free licenses to stream Activision games if a consumer has purchased Activision games. The main idea here is that players don’t need to stream the game from where they bought it.
A senior European Commission official told reporters on Monday that the move will increase competition in the market and allow streaming platforms that don’t have access to Activision games to now have them.
Eyes on the USA
Despite EU approval, Microsoft faces the challenge of convincing competitors like Sony and other regulators, including the US Federal Trade Commission (FTC), that the Activision takeover will not harm competition.
The lawsuit between the FTC and Microsoft is still ongoing. A senior Commission official said that the EU has exchanged views with the FTC on several occasions and is in close cooperation on this issue. Meanwhile, in addition to the EU, Japan (JFTC), Serbia (CPC), Brazil (CADE), Chile (FNE), Saudi Arabia (GAC), South Africa (SACC) and Ukraine (AMCU) have so far ratified the agreement.