The European Commission concluded that the deal could be approved thanks to Microsoft’s cloud gaming commitments.
The EU’s decision to approve this big deal comes less than a month after UK regulators blocked Microsoft’s plans. The UK Competition and Markets Authority (CMA) blocked the deal due to concerns about the cloud gaming market, saying the takeover could lead to “reduced innovation and less choice for UK gamers.” in the next years”. Microsoft has appealed the decision.
The European Commission has identified remedies to allow the deal to proceed through 10-year license agreements that Microsoft has offered to competitors. These include a free license for consumers in EU countries that will allow them to stream via “any relevant cloud gaming service of their choice” all current and future licensed Activision Blizzard PC and console games. Cloud providers will also be offered a free license to make these games available in EU markets via streaming technology.
These licenses are automatic and mean that consumers will have the right to stream Activision Blizzard games they have purchased or are part of a subscription to “any cloud game streaming service of their choice and play them on any device running any operating system.” “. Although there is no confirmation, it appears that the European Commission has asked Microsoft to offer this automatic license to approve the acquisition, and the Xbox maker will now apply it globally.
“Our decision represents an important step in this direction, bringing Activision’s popular games to many more devices and consumers than ever before thanks to the ability to stream games in the cloud,” said Margrethe Vestager, the Commission’s executive vice president for competition policy. European. “The commitments offered by Microsoft will enable streaming of such games on any cloud gaming service for the first time, enhancing competition and growth opportunities.”
Microsoft has spent the last few months trying to address regulatory concerns around cloud gaming, with deals that convince EU regulators but not the UK. The software giant has signed cloud gaming deals with Boosteroid, Ubitus, and Nvidia to allow Xbox PC games to run on these competing cloud gaming services. A similar deal with Nintendo was announced in December. All of these ten-year deals also include access to Call of Duty and other Activision Blizzard games, if regulators approve the deal.
The CMA fears that Microsoft’s control of Call of Duty, Overwatch and World of Warcraft would give it a huge advantage over rivals in the cloud gaming market: the regulator estimates that Microsoft owns around 60 to 70 percent of the global purchase of cloud gaming services. In fact, he expressed his dissatisfaction with the EU’s decision, clarifying that he stands by his original decision.
However, Microsoft’s UK appeal is likely to take months to complete. Today’s EU ruling may help boost Microsoft’s chances of landing this big deal, but the company is still facing legal battles in the US and UK. Regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan and South Africa have also approved the deal. China, South Korea, New Zealand and Australia are still considering the deal.
Microsoft’s next big hurdle is national approval. The Federal Trade Commission filed a lawsuit to block the Microsoft and Activision Blizzard deal late last year, and the case is still in the filing stage. The pertinent hearing is scheduled for August 2, so we are still months away from knowing the final result of the case.