Microsoft Activision deal approved by EU Commission

After a long and drawn-out process, the European Commission has reached its final verdict and granted approval for Microsoft to acquire ownership rights of Activision Blizzard.

The EU Commission was initially concerned the merger might impact the console, PC, and gaming subscription markets negatively, however, after an extensive investigation spanning several months determined this not to be the case. It ultimately concluded that the acquisition would ‘not’ give Microsoft any motivation to hold back Activision titles from its rival PlayStation in Europe since on average Europe has around four PlayStations for every one Xbox.

Call of Duty is also not as popular in Europe as in America, so making games exclusive to one console would hurt Microsoft financially in the long run. As a means of gaining approval from the EU commission, Microsoft has also made a 10-year commitment to speak to any concerns regulators may have regarding the digital cloud streaming marketplace.

In regards to these subscription-based services, it was decided by the commission that Microsoft would not make Activision games exclusive to services such as Game Pass for fear of harming sales and angering gamers.

However, the finding from the EU regulator’s investigation did show that the merger would indeed disrupt competition in cloud-based services, and would increase Microsoft’s influence on Windows operating systems in particular. To counteract the issues raised by the commission, Microsoft has offered EU customers a free license to stream and play all existing and future Activision games on both PC and console, with the ability to stream them all through whichever cloud streaming service is preferable, including competing ones. In simpler terms, Microsoft will soon allow EU gamers to stream any of Activision Blizzard’s games on either console or PC. This offer will also be active for at least 10 years and Microsoft is confident this will remedy the commission’s concerns and also ensure the same quality as any traditionally downloaded game.

Microsoft has doubled down on its commitment to license Activision Blizzard titles to competitors such as PlayStation and is devoted to implementing more improvements in cloud gaming services moving forward. Microsoft believes this availability of Activision titles for all cloud game streaming services will greatly boost the evolution of the media platform over the coming years, and will ultimately benefit both competition and gamers in the long run, by bringing Activision games to new platforms and devices.

Per the approval, an independent administrator will be tasked to make sure Microsoft follows through and maintains these promises. With that being said, the takeover is far from complete as Microsoft is appealing the decision of Competition and Markets Authority in the UK to block the deal. Meanwhile, in the US, the Federal Trade Commission has also filed a lawsuit to stop the deal from taking place.

Both the UK authority and US Commission disagree with the European Commission’s verdict and feel that the deal would indeed harm cloud gaming competition long-term. Both regulating bodies feel Microsoft’s proposal will allow the company to largely and unfairly set the terms and conditions for the market for the next ten years. Sooner or later it would replace the free, open, and competitive market, with one subject to the command of Microsoft, the games it sells, the platforms selling them, and other conditions of sale.

This is just one of the reasons these regulating groups have rejected Microsoft’s buyout of Activision and have stepped in to prevent the deal. Microsoft is set to appeal these rulings, but as of right now, the UK and US governing bodies are standing by their decision.