Microsoft Buying Activision Blizzard for $68.7 Billion
Weeks ago, the UK regulators blocked Microsoft from acquiring Activision Blizzard. This week, however, the European Commission concluded that the acquisition can pass. Why the change of heart?
EU said that Microsoft is committed to cloud gaming. The Windows maker will have no incentive “to refuse to distribute Activision’s games to Sony.” The commission also said that if Microsoft decides to stop Activision’s games from appearing on the PlayStation, it will not harm competition significantly in terms of the consoles market.
“The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.” – Brad Smith
But the regulators found that the deal could harm competition, especially in the PC distribution and console games through cloud gaming services.
The Remedy
To remedy it, the commission found solutions to let the deal go ahead. One of the remedies is the 10-year licensing deals that Microsoft offered to its competitors. It would include a free license to gamers in EU countries that will let them stream via a cloud game streaming service that they want. It means that consumers can stream current and future Activision Blizzard PC and console games that they have a license for.
All cloud providers will get a free license to stream the games in EU markets.
Since the licenses are automatic, the consumers will have a right to stream the games that they bought or subscribed to through cloud game streaming service and play them on any device regarding of the OS they are using. The EU is said to have requested Microsoft to offer this automatic license.
The direction of the EU to approve the acquisition is a great step forward for the Xbox maker. However, the company still has several challenges to overcome to complete the deal. Currently, the company is appealing the CMA’s decision. It will take months to overcome it. Even if the EU has approved it, the deal will have to go through various steps before another decision can be made.
Microsoft has to face the US Federal Commission. The commission sued the company to block the acquisition last year. The hearing is set for August.
Acquiring Activision Blizzard would definitely expand Microsoft’s gaming portfolio. It will diversify its offerings and reach a broader audience. Activision Blizzard is a prominent game publisher known for its popular Francises such as Call of Duty, World of Warcraft, and Candy Crush. Adding these franchises to Microsoft’s existing lineup, including the Xbox brand and several game studios could boost Microsfot. The deal could definitely strengthen Microsoft’s position in the gaming industry.
Microsoft’s market share in the gaming industry will definitely increase once the deal is done. It could give the company a competitive advantage and allow it to better compete with other industry giants, like Sony and Nintendo.
Even if Microsoft has overcome this challenge with the EU, it still has a tougher battle ahead.
