The European Union approves Microsoft’s acquisition of Activision Blizzard, but there are still significant obstacles to the acquisition
EU approves Microsoft's acquisition of Activision Blizzard, but significant obstacles remain
【PhoneAuto News】Microsoft’s major acquisition of Activision Blizzard has cleared the biggest regulatory hurdle in Europe. The European Commission has approved the proposed merger worth $68.7 billion and stated that even if Microsoft decides to restrict all Activision Blizzard games to the Xbox platform in the future, it “will not seriously harm competition in the gaming console market.”
It also noted that the deal represents a “significant improvement” in cloud gaming compared to the current situation. The institution stated that it conducted a thorough investigation into competition concerns raised by regulatory bodies and competitors such as Sony, and concluded that the merger terms “completely address” all concerns and fair market standards.
Recall that Sony opposed the deal on the grounds that Microsoft’s acquisition of Activision Blizzard would ultimately make it the gatekeeper of cash cow games such as Call of Duty. In response, Microsoft attempted to alleviate these concerns by extending the 10-year agreement for Call of Duty to continue running on the PlayStation platform, while Nintendo continued to sign such a contract with Microsoft.
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The European Commission’s statement pointed out that even if Call of Duty is restricted to the Microsoft platform only, the influence and content of Sony, the Japanese gaming giant, is still enough to maintain its competitive advantage. However, in the United States, trouble is not over yet, as the Federal Trade Commission is also investigating the deal.
Just a few weeks ago, the Microsoft acquisition of Activision Blizzard was blocked in the UK. A key argument behind the decision was that the deal would give Microsoft an unfair advantage in the gaming industry, particularly in cloud gaming. Microsoft’s cloud gaming services have a wide coverage and are all associated with the Xbox Game Pass subscription service.
However, industry giants such as Valve, Nvidia, Steam, and even Amazon are involved. On the other hand, Sony also has a popular game subscription service in its PlayStation product lineup. The approval of the European Commission also addresses these exclusivity issues. The institution pointed out that “Microsoft has no reason to refuse to distribute Activision’s games to Sony because Sony is the main distributor of console games.”
The report also stated that Sony has an unbalanced lead in the market when it comes to sales of PlayStation and Microsoft Xbox series game consoles. However, not everything is rosy for Microsoft. The EU states that after a lengthy assessment, if Microsoft restricts the cloud gaming of Activision Blizzard games to its own platform in the future, it will harm competition.
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