MICROSOFT’S $68.7 BILLION ACQUISITION OF ACTIVISION BLIZZARD APPROVED BY EU REGULATORS
Microsoft’s acquisition of Activision Blizzard has been approved by EU regulators, who found Microsoft “would have no incentive to refuse to distribute Activision’s games to Sony.” However, EU regulators did find that the acquisition could harm competition in the distribution of PC and console games through cloud gaming services. To allow for the deal to proceed, Microsoft has offered 10-year licensing deals to competitors, including a free license to consumers in EU countries to stream Activision Blizzard games via any cloud game streaming service of their choice.
UK regulators blocked the deal over concerns it could lead to reduced innovation and less choice for UK gamers in the cloud gaming market, which Microsoft is currently appealing. Microsoft’s deals with cloud gaming rivals Boosteroid, Ubitus, and Nvidia, as well as with Nintendo, include access to Call of Duty and other Activision Blizzard games if the deal is approved by regulators.
The CMA fears that Microsoft controlling Call of Duty, Overwatch, and World of Warcraft would give it an unfair advantage over competitors in the cloud gaming market, which the regulator estimates Microsoft currently holds 60-70% of global cloud gaming service share. Microsoft is still facing regulatory scrutiny in the US and UK, with the FTC suing to block the deal, currently at the document discovery stage.
MICROSOFT ADDRESSES CLOUD GAMING CONCERNS
Microsoft has spent the past few months addressing regulators’ cloud gaming concerns by signing deals with cloud gaming rivals and offering 10-year licensing deals to competitors, but this has only convinced EU regulators so far. However, Microsoft’s appeal in the UK will likely take months before the process is complete. Today’s EU decision may boost Microsoft’s chances of getting the deal approved, but the company still faces regulatory battles in multiple countries.
MICROSOFT’S NEXT BIG HURDLE
Microsoft still faces regulatory scrutiny closer to home, with the FTC suing to block the Activision Blizzard acquisition. An evidentiary hearing is now scheduled for August 2nd, and the outcome of the case remains unknown.