Sunday, December 3, 2023

Europe approves Microsoft’s purchase of Activision Blizzard

The European Commission has approved the purchase of Activision Blizzard by Microsoft. The $68.7 billion deal has been given the go-ahead by European regulators, as rumored for months. The verdict has come to light a week before the deadline set by the executive arm of the EU.

“Approval is conditional on full compliance with the commitments offered by Microsoft. They fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming compared to the current situation,” it says. the notice of the European Commission.

Thus, Microsoft wins key battle to close Activision Blizzard transaction. Keep in mind that the ruling by European regulators is known just weeks after the British CMA vetoed this agreement.

A key point for the approval of the purchase is that Microsoft will have to allow users who have purchased Activision Blizzard games —call of dutyFor example-, they can play them on any streaming platform of their choice at no additional cost. But not only that, but free licenses will also be offered to rival cloud gaming services.

“To address the competition concerns identified by the Commission in the market for the distribution of PC and console games via cloud game streaming services, Microsoft offered the following comprehensive license commitments, with a term of 10 years:

  • A free license for consumers in the European Economic Area that would allow them to stream, through any cloud game streaming service of their choice, all current and future Activision Blizzard games for PC and console for those who have a license.
  • A free license for cloud game streaming service providers to allow EEA gamers to access any Activision Blizzard PC and console game.”

Brad Smithpresident of Microsoft, clarified, in any case, that although the commitments were presented to obtain the approval of the purchase in the European Union, the new automatic licenses will apply globally. “The European Commission has required Microsoft to automatically license popular Activision Blizzard games to competing cloud gaming services. This will apply globally and allow millions of consumers around the world to play these games anywhere. device of your choice,” he tweeted.

The purchase of Activision Blizzard will not harm PlayStation, says the European Commission

Photo by charles sims on Unsplash

Beyond the commitments made by Microsoft to get the purchase of Activision Blizzard approved, the decision of the European Commission brings other important conclusions. Among the most relevant, that regulators do not believe the acquisition will harm PlayStation.

Europe believes that Redmond has no incentive to refuse to distribute Activision Blizzard games on the Sony platform. On the contrary, they assure that they would have more than enough reasons to continue offering them, considering that the Japanese console is the best-selling in the region, and by far. In fact, it is mentioned that among the players located in the European Economic Area, there are 4 PlayStation for every Xbox.

But that is not all. Regulators believe that competition in the European console market would not be affected even in the extreme case of Microsoft removing all Activision Blizzard games from PlayStation. And here the European Commission has given Sony a lunge on the importance of call of duty:

“Even if Call of Duty is played primarily on console, it’s less popular in the EEA than it is in other regions of the world, and it’s less popular in the EEA within its genre compared to other markets. So even without being able to offer this specific game, Sony could take advantage of its size, extensive catalog of games and position in the market to defend itself against any attempt to weaken its competitive position.”

A battle still far from over

Activision Blizzard, Bobby Kotick

Despite the approval of the European Commission, disputes surrounding the purchase of Activision Blizzard are still far from over. Microsoft still has to face the toughest nut to crack: the United States Federal Trade Commission (FTC). Let’s not forget that the North American organization sued the Redmond people to block the agreement, and everything indicates that it will look for all possible ways to prevent its completion.

To this is added the appeal of the veto made by the British CMA. A process that can take several months and that promises to be complex to solve for those of Phil Spencer. In fact, as soon as the decision of the European Commission was well known, the UK regulators issued a statement expressing their disagreement with the approval.

“UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming. The CMA concluded that cloud gaming must continue as a free and competitive market to drive innovation and choice in this rapidly evolving industry.

Microsoft’s proposals, accepted today by the European Commission, would allow Microsoft to set the terms and conditions of this market for the next 10 years. They would replace a free, open, and competitive marketplace with one subject to continued regulation of the games Microsoft sells, the platforms it sells them to, and the terms of sale. This is one of the reasons why the CMA’s independent panel rejected Microsoft’s proposals and prevented this deal.

While we recognize and respect that the European Commission has the right to take a different point of view, the CMA stands by its decision.”

For now, Microsoft celebrates the approval of the purchase of Activision Blizzard in Europe. Those of Redmond have taken a crucial step to put their hands on call of duty, world of warcraft and other company franchises. Nevertheless, they still have a long way to go before the deal is finalized.

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