Microsoft’s Attempt to Purchase Activision Blizzard Approved by EU Regulators
Microsoft’s bid to acquire Activision Blizzard, the publisher of popular games like Call of Duty, has been approved by European Union (EU) regulators. The European Commission (EC) stated that Microsoft had adequately addressed concerns related to competition issues, leading to the approval. This decision follows the UK’s recent blocking of the deal, citing concerns about potential harm to competition in the emerging cloud gaming industry.
The proposed acquisition, valued at $69 billion (£55 billion), is set to become the largest deal in gaming history. However, it has divided global regulators, and approval is still needed from regulatory bodies in the UK, EU, and the US. In December, the US Federal Trade Commission filed a lawsuit to block the deal, with a final decision unlikely before the end of the year.
The EC’s approval came with the condition that Microsoft provides ten-year free licensing deals, ensuring European consumers and cloud gaming services access to Activision’s PC and console games. The EU competition watchdog stated that these commitments adequately addressed competition concerns and represented a significant improvement for cloud gaming. It also noted that Microsoft’s market investigation indicated no potential harm to rival consoles or multi-game subscription services.
Despite the EU’s approval, significant hurdles remain for the deal’s success. The UK’s Competition and Markets Authority (CMA) vetoed the deal last month, and Microsoft and Activision filed an appeal. The CMA recently imposed further restrictions, preventing both companies from acquiring stakes in each other without prior written consent. The CMA’s chief executive, Sarah Cardell, affirmed the agency’s decision and expressed concern about Microsoft’s proposals potentially limiting free and open competition in the market.
For Microsoft, this acquisition is crucial as it aims to catch up with its main competitor, Sony, in the console market. The company sees it as an investment in the future of gaming, particularly through its Game Pass service, often described as a Netflix for games. Microsoft believes that the future lies in subscription-based access to game libraries, rather than one-time purchases, and aims to bolster its Game Pass offering. With titles like Call of Duty, World of Warcraft, and Overwatch under its control, Microsoft could significantly enhance its service.
Furthermore, Microsoft’s focus on cloud gaming aligns with its vision for the future. Cloud gaming allows players to stream games on various devices, from smartphones to consoles and high-end PCs, similar to streaming platforms like Amazon Prime or Disney+. While Microsoft’s Game Pass service is already compelling, this deal would give it access to some of the world’s most popular games, potentially transforming the way people play games in the future.