The Microsoft logo can be seen on the displayed Activision Blizzard game character.
Dice Ruvic | Reuters
EU regulators approve Monday microsoft Proposed $69 billion buyout of bookmaker Activision Blizzardsubject to remedies offered by the US tech giant.
The European Commission, the EU’s executive arm, said Microsoft provided remedies in the nascent cloud gaming space, avoiding antitrust concerns. The focus of these remedies is to allow users to stream their purchased Activision games on any cloud streaming platform.
The green light in Europe is a huge win for Microsoft, after Britain’s top competition watchdog blocked the deal last month.
Regulators around the world have been investigating whether Microsoft’s acquisition of Activision could distort competition in the console and cloud gaming markets. One area regulators have questioned is whether Microsoft will take Activision games and keep them exclusively on the US giant’s own platform.
Activision powers some of the biggest console and PC games in the world, including the Call of Duty series and World of Warcraft.
The EU’s decision came after Britain’s Competition and Markets Authority blocked the deal last month over concerns it would reduce competition in the nascent cloud gaming market. The CMA said Microsoft would find it commercially beneficial to make major Activision titles, such as Call of Duty, exclusive to its own cloud gaming platform. Nonetheless, the CMA said the acquisition would not reduce competition in the console market.
Microsoft faces backlash from regulators and some rivals, including the maker of the PlayStation game console sony.
Microsoft is trying to allay the Commission’s concerns about giving Activision an exclusive title ahead of the EU’s decision. Microsoft President Brad Smith met with EU officials in February before the tech giant said it would bring Xbox PC games to Nvidia’s cloud gaming service. The chipmaker had reportedly expressed opposition to the acquisition.
Microsoft Offers Remedy for Cloud Gaming
The committee reviewed various aspects of the deal, including the impact on competition in the console and fast-growing cloud gaming markets.
Compared with Sony’s PlayStation 5 and Nintendo Switch, Microsoft’s Xbox has lagged far behind in the latest generation of consoles. But the US giant has bet its future on the so-called cloud gaming market, an emerging part of the industry.
The European Commission found that the Activision acquisition would not reduce competition in the console market, given Sony’s dominance of the PlayStation space.
A large part of the EU investigation revolves around cloud gaming.
Cloud gaming will allow people to efficiently stream games from servers, eliminating the need for expensive dedicated hardware such as gaming consoles. These games can be played on existing devices such as TVs, smartphones and laptops. For example, if a user purchases a game online, they can stream it through a cloud gaming service.
But the key to cloud gaming’s success is also the fact that users can instantly access a vast catalog of games through a subscription service, a bit like Netflix. That’s part of the reasoning behind Microsoft’s proposed acquisition of Activision.
EU regulators have found that as a result of the acquisition, Microsoft will harm competition in the distribution of PC and console games through cloud gaming services. One way competition would be harmed if Microsoft made those Activision games exclusive to its own platform, the commission said.
But the European Commission said Microsoft offered remedies to ease competition concerns. Consumers who have purchased or will purchase Activision games will be able to play them on any cloud gaming platform of their choice. Microsoft will also provide a royalty-free license to the cloud gaming platform if consumers purchase Activision games. The idea is that gamers don’t necessarily need to stream games where they buy them.
A senior European Commission official told reporters on Monday that the move would increase competition in the market and allow streaming platforms that could not access Activision games to now have them.
FTC decision takes center stage
Despite the European Union’s approval, Microsoft still faces the difficult task of convincing rivals such as Sony and other regulators, Including the US Federal Trade Commission, that Activision’s acquisition will not harm competition.
The case between the FTC and Microsoft is still ongoing. A senior European Commission official said that the EU has exchanged views with the US Federal Trade Commission on several occasions and has cooperated closely on this.