Will the Microsoft-Activision Acquisition Ever Happen? The EU Brings it One Step Closer
After the Competition and Markets Authority in the UK attempted to block the Microsoft-Blizzard acquisition over exclusivity concerns, the EU has now given the green light to the $68.7 billion deal.
It’s been a rocky road for Microsoft. The attempt to acquire Activision Blizzard has been met with opposition from all angles. First, Sony predictably brought up concerns over Activision Blizzard exclusively releasing games on the Xbox. This would include major titles like Overwatch and Call of Duty, which already has a deal with Sony to release games on the PlayStation ahead of competition.
Then many government establishments also reacted negatively to the idea. It felt like Microsoft would have a monopoly on the gaming industry, removing competition between the Xbox and PlayStation while also potentially launching Bethesda and Activision Blizzard games exclusively on their own consoles. While Microsoft denied these allegations, it was still unclear if the plan would change in the future.
EU Not Concerned with Distribution and Exclusivity Possibilities
But now, the EU has dismissed Sony’s concerns. Regulators noted that Microsoft would have “no incentive” to refuse the distribution of Activision’s games to Sony platforms. Why? This would eliminate many potential sales, since Sony is the “leading distributor of console games worldwide.”
The EU isn’t fully done with the investigation, however. There’s still the whole pesky Cloud Gaming situation. Regulators admitted that the deal may harm the Cloud Gaming market, which is ultimately what caused the UK regulators to block the deal. But since then, Microsoft signed a deal with NWave, a European cloud gaming platform.
Despite the potential brown nosing move, Microsoft is still being required to license popular Activision Blizzard games the Cloud Gaming services automatically, according to President Brad Smith.
“The European Commission has required Microsoft to license popular Activision-Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”
Many in the gaming community agreed with this policy and became excited about the acquisition possibly going through. But the UK’s Competition and Markets Authority is growing concerned about the possibility of the merger.
In a statement responding to EU’s approval, the CMA stated that the UK, US, and European competition authorities unanimously agree that the merger will “harm competition,” even in cloud gaming. Microsoft would potentially be given “free reign” to set the Cloud Gaming market terms. For these reasons, the CMA concluded that it will continue to block the deal.
For now, Microsoft still has more to do before the acquisition can be confirmed and finalized. The merger might have to come with legally enforced limitations or regulations. But Microsoft is planning to appeal the CMA’s decision, especially now that it has the EU on its side.
