Microsoft’s $69bn Bid to Acquire Activision Blizzard Gets Green Light from European Regulators

Published: 16th May 1:30PM

European Union (EU) regulators have sanctioned Microsoft’s enormous $69 billion (£55 billion) proposal to take over the publisher of Call of Duty, Activision Blizzard. The European Commission (EC) has confirmed that Microsoft has successfully addressed their competitive concerns.

This news arrives three weeks after the United Kingdom halted the deal due to fears of negatively impacting competition in the burgeoning field of cloud gaming. The proposed acquisition, if successful, will stand as the most significant transaction in the history of the gaming industry, but it has split regulatory bodies across the globe.

For the deal to progress, Microsoft and Activision require approval from regulatory authorities in the United Kingdom, European Union, and the United States. The U.S. Federal Trade Commission lodged a lawsuit to obstruct the deal in December, with a judicial decision not expected until the year’s end.

Essential Insights on Microsoft’s Massive Deal

The EC has given the acquisition a thumbs-up, noting that Microsoft’s 10-year free licensing deals—promising European consumers and cloud game streaming services access to Activision’s PC and console games—would maintain healthy competition in the market.

The EU competition watchdog has assured that “the commitments fully address the competition concerns identified by the Commission and represent a considerable improvement for cloud gaming in comparison to the current situation.”

Following an extensive market investigation, the EC concluded that Microsoft “would not be able to harm rival consoles and rival multi-game subscription services.” The Commission added that cloud game streaming service providers have expressed positive responses and displayed interest in the licenses, with some having already formed agreements with Microsoft based on their proposals.

Challenges Ahead

Last month’s unexpected veto of the deal by the UK’s Competition and Markets Authority (CMA) led experts to warn of substantial obstacles that the deal will need to overcome to be successful.

Microsoft and Activision have filed an appeal and are said to have enlisted high-profile lawyers, previously representing British Royals, to challenge the decision. Furthermore, the CMA further complicated the situation on Thursday by prohibiting Microsoft and Activision Blizzard from buying stakes in each other without “prior written consent.”

CMA Chief Executive Sarah Cardell reiterated their decision in response to the European Commission’s announcement. She expressed concerns that Microsoft’s proposals, accepted by the European Commission, could replace a free, open, and competitive market with one subject to ongoing regulation.

Aiming for the Future with Cloud Gaming This deal holds significant importance for Microsoft as it strives to close the gap with its main competitor, Sony, which has led the console market in recent years.

This colossal investment attempt by Microsoft is perceived as a strategic move for the future of gaming, rather than its present. Microsoft is heavily investing in its Game Pass service, akin to a ‘Netflix for games’, betting on a future where players subscribe to game libraries instead of making individual purchases.

Despite the attractive proposition of Game Pass, it lacks the quantity and quality of new titles necessary to completely revolutionize the way most people play games. Acquiring control of popular games like Call of Duty, World of Warcraft, and Overwatch could significantly enhance the service.

Cloud gaming extends this principle, enabling people to stream their games on any device they own – from phones to consoles or high-end PCs, similar to watching Amazon Prime or Disney+ but with video games.