New reversal in the affair of the acquisition of Activision-Blizzard by Microsoft: the EU approved the proposed acquisition, only a few weeks after the refusal of the authorities of the United Kingdom. Could the project succeed, and in how long?
European Union (EU) competition regulators have approved Microsoft’s proposed $68.7 billion acquisition of Activision-Blizzard. This decision comes only a few weeks after the refusal of the takeover of Activision-Blizzard by Microsoft in the United Kingdom. Unlike their British colleagues, European Commission decision-makers concluded that the deal did not pose too great a risk to competition.
The EU has heard Microsoft’s arguments that the Xbox is being taken down by PlayStation and Nintendo. Thus the Redmond firm “would have no reason to refuse to distribute Activision’s games to Sony” et “even if Microsoft decided to remove Activision’s games from the PlayStation, it would not significantly harm competition in the console market“.
Will the takeover of Activision-Blizzard by Microsoft succeed?
However, EU regulators said the acquisition could harm competition in cloud gaming services. However, the European Commission is proposing corrective measures to allow the operation to go ahead.
This would include the possibility for consumers in EU countries to stream via any cloud game streaming service Activision Blizzard games, on PC as well as consoles, for which they have a license . Cloud service providers will also be offered a free license to distribute these games on the European market: a spectacular shortfall for Microsoft.
“Our decision represents an important step in that direction, making popular Activision games available to many more devices and consumers than ever before through cloud game streaming.“, says Margrethe Vestager, Executive Vice-President in charge of competition policy at the European Commission. “Microsoft’s proposed commitments will allow these games to be streamed in any cloud game streaming service for the first time, increasing competition and opportunities for growth..”
UK blocks Microsoft takeover of Activision
As we reported last month, the CMA, the UK competition authority, has dismissed the Microsoft deal. The British authority rightly blocked the operation for reasons related to the cloud gaming market, stating that the acquisition could lead to “reduced innovation and choice for UK gamers in coming years“.
Read: Activision Blizzard blasts UK for blocking Microsoft takeover of studio
Still, Microsoft had spent the past few months trying to address regulators’ concerns. The company founded by Bill Gates had thus placed several advertisements in press titles in the United Kingdom, in particular the very reputable Financial Times and the very popular Daily Mail, touting this deal which would bring Call Of Duty to 150 million additional players. . How the company had arrived at this figure, mystery.
The Windows maker also swallowed its pride, promising that Xbox Game Pass games would be available on rival cloud gaming services like Nvidia’s. A similar agreement was reached with Nintendo in December. These agreements imply in particular that the Call of Duty franchise remains for 10 years at Nintendo, Steam and PlayStation if the takeover of Activision-Blizzard is approved by the regulatory authorities. It would seem that these solutions proposed by Microsoft have convinced the regulators of the EU, but not those of the United Kingdom.
Microsoft appeals to complete its takeover of Activision-Blizzard
Britain’s CMA fears the formation of a gaming supergiant, owner of the Call of Duty, Overwatch and World of Warcraft franchises, will give it a huge advantage over its rivals in the cloud gaming market. Indeed, the regulator estimates that Microsoft already holds 60-70% of the global cloud gaming market share.
However, Microsoft has appealed this decision, it may well be that the takeover goes to the end if the CMA were to change its mind, for example if Microsoft provided more guarantees. This process could well take months before it is completed in the UK alone.
Microsoft still has to prove its good intentions to US authorities, which is no small feat. In late 2022, the Federal Trade Commission (or FTC) filed a lawsuit to block the takeover. This proceeding is still at the document review stage. A first hearing is scheduled for August 2, which means that the outcome of this case will not be known for several months.
Read: Microsoft’s takeover of Activision Blizzard is under serious threat
In the rest of the world, regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan and South Africa so far agree with the EU and endorse the deal. We will still have to wait for the decisions of China, South Korea, New Zealand, Australia and of course the United States.
