European Union regulators have approved Microsoft’s $69 billion project to acquire Activision Blizzard, provided the US tech giant offers remedies, CNBC reports.
The EU found that Microsoft “would have no incentive to refuse to distribute Activision’s games to Sony” and that “even if Microsoft decided to withdraw Activision’s games from PlayStation, this would not significantly harm competition in the console market”. However, EU regulators, like those in the UK, found that the acquisition could harm competition in the distribution of PC and console games via cloud gaming services.
The EU’s decision comes after the UK’s Competition and Markets Authority last month blocked the deal because it risked reducing competition in the nascent cloud gaming market. The CMA said it would be commercially advantageous for Microsoft to make Activision’s key games, such as Call of Duty, exclusive to its own cloud gaming platforms. However, the CMA said the acquisition would not reduce competition in the console market.
The Commission has examined many areas related to the transaction, including the impact on competition in the console market and the rapidly growing cloud gaming market.
Although Microsoft lags behind with its Xbox in the last generation of consoles compared to Sony’s PlayStation 5 and Nintendo Switch, it has staked its future on the so-called cloud gaming market.
The EU Commission found that the Activision takeover would not reduce competition in the console market given Sony’s dominance with the PlayStation.
EU regulators found that the acquisition would harm Microsoft’s ability to compete in the distribution of PC and console games via cloud gaming services. According to the Commission, one of the ways competition would be harmed is if Microsoft made these Activision games exclusive to its own platform.
However, the European Commission said Microsoft had offered remedies to allay competition concerns. Consumers who have purchased or will purchase an Activision game will be able to stream those titles on any cloud gaming platform of their choice. Microsoft will also offer cloud gaming platforms free licenses to stream Activision games if the user has purchased them. That is, gamers don’t necessarily have to stream the game where they bought it.
A senior European Commission official told reporters on Monday that the move would increase competition in the market and allow streaming platforms that did not have access to Activision’s games to now have them.