Following an “in-depth” investigation, the European Commission has approved Microsoft’s proposed acquisition of Activision-Blizzard. The investigation began last November, with the commission citing Microsoft’s potential expansion into the cloud gaming market as a primary concern. This was just one of many roadblocks the company faced, including ongoing battles with America’s Federal Trade Commission (FTC) and the UK’s Competition and Markets Authority (CMA).
Roughly summarized, here are the conclusions the European Commission came to as a result of their investigations:
Microsoft’s merger would not provide them any incentive to refuse to distribute Activision-Blizzard games to Sony consoles.
Even if Microsoft did withhold those games from Sony, it would not significantly harm the console market.
Even prior to the merger, Activision would not make its games available on multi-game subscription services (i.e. Xbox Game Pass)
If Microsoft made Activision games exclusive to their cloud service, it would harm the growth of the market by reducing competition, and also improve Microsoft’s position as a developer of PC operating systems.
In response, Microsoft has agreed to a free license that would allow residents in the European Economic Area to use any cloud platform they want to stream all current and future Activision-Blizzard games, as well as a license that allows cloud service providers to provide those services. The European Commission is quite pleased with this outcome, stating, “These commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud game streaming compared to the current situation.”
Additionally, Activision CEO Bobby Kotick released this statement on the decision.
The EC conducted an extremely thorough, deliberate process to gain a comprehensive understanding of gaming. As a result, they approved our merger with Microsoft, although they required stringent remedies to ensure robust competition in our rapidly growing industry. We have deep roots in Europe. Our company was founded in France. Candy Crush—one of our most successful franchises—was created in Sweden. And the senior leadership of our company comes from across the EU, including Austria, Germany, and Sweden. We intend to meaningfully expand our investment and workforce throughout the EU, and we’re excited for the benefits our transaction brings to players in Europe and around the world. The majority of the world’s gamers play on mobile phones. Europe has played a pivotal role in the development of gaming, especially mobile gaming, and we expect European game developers will continue to drive growth and innovation. Our talented teams in Sweden, Spain, Germany, Romania, Poland and many other European countries have the skills, ambition, and government support needed to compete effectively on a global scale. We expect these teams to grow and prosper given their governments’ firm but pragmatic approach to gaming.
While this is certainly a sizeable victory for the merger, it still has a long road to travel before being approved. In addition to its block in the UK, the company will have to negotiate with the FTC at a hearing in August.
Do you think this merger will go through? Let us know in the comments!