Microsoft’s $68.7 billion deal to buy Activision Blizzard has been approved by EU regulators, just weeks after UK regulators blocked the takeover. The European Commission concluded that the deal could be approved thanks to Microsoft’s cloud gaming commitments.
The EU’s decision to approve this giant deal comes less than a month after UK regulators blocked Microsoft’s plans. The UK’s Competition and Markets Authority (CMA) blocked the deal due to concerns about the cloud gaming market, saying the takeover could lead to “reduced innovation and less choice for UK gamers in the coming years”. Microsoft has appealed the decision. The European Commission has identified remedies to allow the deal to proceed through 10-year licensing deals Microsoft has offered to competitors.
These include a free license for consumers in EU countries that will allow them to stream through “any relevant cloud gaming service of their choice” all current and future Activision Blizzard licensed PC and console games . Cloud providers will also be offered a free license to make these games available in EU markets via streaming technology.
These licenses are automatic and mean consumers will have the right to stream Activision Blizzard games they’ve purchased or are part of a subscription to “any cloud game streaming service of their choice and play them on any device using any operating system.
Although there is no confirmation, it appears that the European Commission has asked Microsoft to offer this automatic license to approve the acquisition, and the Xbox maker will now apply it globally.
Our decision represents an important step in this direction, bringing Activision’s popular games to many more devices and consumers than before thanks to the ability to stream games in the cloud,” said Margrethe Vestager, executive vice president of competition policy in the European Commission. “The commitments offered by Microsoft will enable the streaming of such games on any cloud gaming service for the first time, enhancing competition and growth opportunities.
Microsoft has spent the past few months trying to address regulatory concerns around cloud gaming, with deals convincing EU regulators but not the UK. The software giant has signed cloud gaming deals with Boosteroid, Ubitus and Nvidia to allow Xbox PC games to run on these competing cloud gaming services. A similar deal with Nintendo was announced in December.
All of these ten-year deals also include access to Call of Duty and other Activision Blizzard games, if the deal is approved by regulators. The CMA fears that Microsoft’s control of Call of Duty, Overwatch and World of Warcraft would give it a big advantage over rivals in the cloud gaming market – the regulator estimates that Microsoft owns around 60 to 70 percent of the global purchase of cloud gaming services. In fact, she expressed her displeasure with the EU’s decision, clarifying that she stands by her original decision.
However, Microsoft’s appeal in the UK will likely take months to complete. Today’s EU ruling may help boost Microsoft’s chances of getting this giant deal through, but the company still faces legal battles in the US and UK. Regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan and South Africa have also approved the deal. China, South Korea, New Zealand and Australia are still considering the deal. Microsoft’s next big hurdle is domestic approval. The Federal Trade Commission filed a lawsuit to block Microsoft and Activision Blizzard’s deal late last year, and the case is still in the docketing stage.
The relevant hearing is scheduled for August 2, so we are still months away from knowing the final outcome of the case.
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