European Commission Approves Microsoft-Activision Buyout, Paving the Way for an Exciting Future
In a significant development, the European Commission has given the green light to Microsoft’s acquisition of gaming giant Activision Blizzard. The decision was influenced by Microsoft’s commitment to maintain Activision games on rival platforms, ensuring a healthy competitive landscape.
The European Union (EU) expressed confidence that Microsoft would not withhold Activision games from Sony, as doing so would not significantly harm competition in the consoles market. The EU emphasized that Sony’s market position, extensive games catalog, and size would enable it to counter any attempt to weaken its competitive stance.
The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.
— Brad Smith (@BradSmi) May 15, 2023
As part of the approval, Microsoft is obliged to grant automatic licensing of Activision Blizzard games to competing cloud gaming services globally. This requirement aims to offer gamers greater freedom to choose the platform on which they prefer to play these games.
Initially, the EU had concerns about Microsoft’s dominance in the cloud gaming space and the potential impact on competition in PC and console game distribution. However, Microsoft addressed these concerns by offering remedies. The company provided free licenses to consumers in the European Economic Area (EEA) for streaming current and future Activision Blizzard games via any cloud game streaming service of their choice. Additionally, EEA-based gamers interested in streaming Activision Blizzard games through cloud gaming services were also granted free licenses. These commitments, valid for 10 years, satisfied the EU’s concerns.
Activision CEO Bobby Kotick welcomed the EU’s decision, emphasizing the need for robust competition in the gaming industry. He highlighted the significant role played by European game developers in driving growth and innovation, particularly in mobile gaming.
While the EU has approved the merger, the United Kingdom’s Competition and Markets Authority (CMA) holds a different view. The CMA believes the acquisition could lead to reduced innovation and has imposed further restrictions on Microsoft and Activision Blizzard. The CMA contends that Microsoft will have the power to shape the terms and conditions of the market for the next decade, a perspective challenged by Microsoft.
In the US, the Federal Trade Commission (FTC) has filed a legal complaint to block the deal. The FTC’s case will be examined in an evidentiary hearing in August. With ongoing debates in multiple jurisdictions, including the UK and the US, the outcome of the Microsoft-Activision Blizzard acquisition remains uncertain.
As the situation evolves, stay informed about the next steps for Microsoft and Activision Blizzard in this captivating saga.
