European Commission Approves Microsoft’s Activision-Blizzard Acquisition

After an “in depth” investigation by the European Commission, Microsoft has been approved to acquire Activision Blizzard. In November last year, the European Commission began an investigation into Microsoft’s possible expansion in the cloud gaming industry. It was only one of the many roadblocks that Microsoft faced. Other obstacles included ongoing fights with America’s Federal Trade Commission and UK’s Competition and Markets Authority.

The European Commission’s findings are summarized below.

• Microsoft is not motivated by the merger to deny Sony access to Activision Blizzard’s games.
• Microsoft’s decision to withhold these games from Sony would have little impact on the market.
• Activision refused to make their games available for multi-game subscriptions services, such as Xbox Game Pass. Xbox Game Pass
• Microsoft could improve their position as an operating system developer by making Activision’s games available exclusively through its cloud service. It would also harm market growth because it reduces competition.

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.

To gain a thorough understanding of the gaming industry, The EC undertook a deliberate and meticulous process. In the end, our merger with Microsoft was approved, even though they demanded stringent measures to guarantee robust competition in this rapidly expanding industry.  In Europe, we have deep roots. Our company was established in France. Candy Crush—one of our most successful franchises—was created in Sweden. Senior leadership at our company is from all over 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 played an important role in gaming development, particularly mobile gaming. We expect European developers to continue driving growth and innovation. The talented team in Sweden, Spain Germany Romania and Poland, as well as many other European nations, has the ambition and skills to effectively compete on a worldwide scale. We expect these teams to grow and prosper given their governments’ firm but pragmatic approach to gaming.

Although this merger has made a significant step forward, there is still a lot of work to be done before it can be approved. Along with its UK block, the company has to also deal with the FTC during an august hearing.

Are you confident that this merger is going to happen? Comment below!