Microsoft and Activision Blizzard Deal Greenlit by European Union; Breakthrough
The European Commission has backed Microsoft's acquisition of Activision Blizzard, but under certain conditions.
Update
The UK's Competition and Markets Authority (CMA) has criticized the European Commission's decision (via Twitter). According to it, the "remedies" accepted by the EC are not sufficient and will effectively enable Microsoft to decide the development of the cloud gaming market for another ten years:
"Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this [cloud gaming - ed. note] market for the next 10 years. They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale."
The CMA was aware of Microsoft's proposals, but deemed them insufficient to prevent a threat to competition in the game market.
Original news
United Kingdom with all certainty does not intend to give way to Microsoft, but that does not mean that other regulators will follow its lead. The concerns of the British are not shared by European Union, which agrees to Microsoft's purchase of Activision Blizzard, although not unconditionally (via Twitter).
Ironically, it was the EU that was initially hostile to the deal. In February, the European Commission sent an antitrust warning, which may have heralded that it would block the acquisition deal. Unlike the British, who initially seemed sympathetic to Microsoft.
The final decision was supposed to be made as recently as last month, but it was decided to delay it after Microsoft proposed "countermeasures" (via Reuters). The details were given in a press release available on the European Commission's official website.
The EU has agreed to support the deal. However, Microsoft must accept commitments that fully allay concerns about the impact of this acquisition on competition in the gaming market. Moreover, they are expected to significantly improve the situation in the cloud gaming segment.
It's not Xbox, but the cloud that threatens competition
After an in-depth investigation, the Commission has concluded that with Activision Blizzard's acquisition Microsoft will not succeed in harming competition in the console and multiplatform gaming market.
- According to the EC, Microsoft has no reason to stop the distribution of Activision Blizzard's games on Sony's platforms. Within the EU, there are four PlayStation consoles for every Xbox purchased, so the withdrawal of Call of Duty, Overwatch etc. from PS would be unprofitable.
- Regarding CoD: the Commission believes that even the possible disappearance of this series from the PlayStation catalog would not have a major impact on Sony's position and thus competition in the market.
Nevertheless, the Commission had concerns about the cloud gaming segment. Release of Call of Duty and other Activision Blizzard games exclusively in Game Pass would hurt similar services from competitors, and on top of that would strengthen Microsoft's already strong position on PCs.
Call of Duty streaming for all
It was the latter issue that was implicated in the proposals for "remedies" that prompted the Commission to approve the deal. Microsoft has pledged to provide cloud gaming services and their users with a free license to "stream" Activision Blizzard's games on PCs and consoles.
- This is to ensure that purchasers of these titles on any device will be able to play them in the cloud on any platform across all services.
- At the same time, it will guarantee that Activision Blizzard's games will be available with identical content and "quality" on all platforms.
The EC believes Microsoft's commitments will develop the cloud gaming market in Europe.Source: European Commission.
The EC felt that such a solution would not only not threated competition, but would actually be beneficial to the "cloud" gaming segment. Currently, Activision Blizzard does not make its games available for streaming, and the addition of CoD to the catalog of such services would certainly generate a lot of interest.
This is undoubtedly good news for Microsoft, but the company can't yet celebrate the new purchase. The Commission is making its approval of Activision Blizzard deal conditional on "full implementation" of the listed commitments.
In addition, the Redmond giant is still waiting for a decision from the US Federal Trade Commission (FTC), which has so far been hostile to the deal. Back in April, the Americans filed administrative complaint in connection with the proposed acquisition, but it will not be until August 2 that an evidentiary hearing on the matter will be held.
