EU Surprises by Approving Microsoft Activision Merger After UK Shut It Down

EU Surprises by Approving Microsoft Activision Merger After UK Shut It Down

Microsoft’s big deal to eat up one of the biggest power pellets of the video game industry received a boost from EU regulators. On Monday, the European Commission — the body overseeing the Microsoft/Activision Blizzard merger — announced it had approved the $US68.7 billion deal to go forward, as long as the companies pinkie swear they’ll throw a competitive bone to other publishers along the way.

In its announcement Monday morning, the commission said that Microsoft and Activision Blizzard had both agreed to offer free licenses to allow users to stream any of the bought-out publisher’s properties on “any cloud game streaming service. This includes all future Activision Blizzard titles for the next 10 years.

Some of these concessions included allowing licenses for big franchises like Call of Duty and Candy Crush to competing cloud gaming services based in the European Economic Area. This includes countries in the European Union as well as Iceland, Liechtenstein, and Norway. The regulatory body said this would “ensure that Activision’s games available for streaming will have the same quality and content as games available for traditional download.”

“The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth,” Executive VP of the European Commission’s competition policy Margrethe Vestager said in the EU’s notice.

In a tweet, Microsoft Vice Chair and President Brad Smith said this move would “empower millions of consumers worldwide to play these games on any device they choose,” Currently, gamers cannot play the latest Call of Duty: Warzone, Diablo, or any of its other titles on a game streaming service.

On the side of Activision, the company called it “a proper roadmap for regulators around the world.” Activision’s Chief Communications Officer Lulu Cheng called the EU’s decision “firm yet pragmatic, unbiased, and fact-driven” further implying this would make one of the largest video game publishers in the world somehow more competitive on the world stage in a “rapidly growing industry.”

Last month, the UK’s competition regulator declared the deal would drastically hurt competition in the video game industry, especially with cloud gaming as Microsoft has been pushing that realm heavily as of late. Both Microsoft and Activision said they would appeal the decision, further mentioning they were willing to offer these or similar concessions to British regulators.

Much of the EU’s original concerns related directly to Sony, whose PlayStation consoles have an edge over Microsoft in Europe. Regulators said Microsoft would have “no incentive to refuse to distribute Activision’s games to Sony.” That’s how the commission reasoned the biggest hurdle was the lack of cloud availability for Activision games. Microsoft has mentioned how it wants to expand its cloud-based offerings, even potentially creating an app store to rival Apple and Google.

Microsoft and Activision Blizzard will need to fight off both the UK’s and the U.S.’ scruples to see their full deal come to fruition. U.S. regulators are more than a little wary about that $US70 billion deal to merge two titans of the video game industry. Last year, the Federal Trade Commission launched a lawsuit to block the deal. The companies have promised to fight off that suit, and there is a hearing on the merger by the FTC scheduled for August.