EU Approves Microsoft Activision Blizzard Acquisition: Will US FTC And UK CMA Pose A Hurdle Now?

The European Union has granted its approval to Microsoft's acquisition of video game manufacturer and publisher Activision Blizzard. The deal is valued at $68.7 billion. The European Commission has accepted remedial measures suggested by Microsoft to ensure fair play and healthy competition.

The EU concluded that Microsoft acquiring Activision Blizzard would not hinder competition in the market. At the heart of this issue were highly sought-after console games such as Call of Duty, which Sony feared Microsoft would monopolize. The acquisition deal is currently under scrutiny by the US FTC and the UK CMA.

EU Accepts Measures Microsoft Proposed To Ensure Competition In Cloud Gaming

Over a year ago, Microsoft announced it intends to acquire Activision Blizzard, an influential and successful game publisher. The deal is valued at $68.7 billion but is yet to go through owing to regulatory and legal hurdles in multiple countries.

The all-cash deal has been closely scrutinized by regulators worldwide. The primary concern is Microsoft's ownership of Activision's popular franchises such as Call of Duty and World of Warcraft would grant the Windows OS maker too much control over the gaming market, particularly with their Xbox console.

Sony, the manufacturer of the popular PlayStation gaming system, has been a vociferous opponent of the deal. Interestingly, a few other concerns have been raised, but they all essentially blocked the deal from going through.

After conducting its review, the European Commission dismissed the possibility of Microsoft cutting off its games from the PlayStation console. The reasoning was that Microsoft would not intentionally stifle its own profits by restricting the accessibility of the games it owns on other platforms.

Will The UK CMA And US FTC Play Spoilsport?

UK's Competition and Markets Authority (CMA) recently blocked Microsoft's acquisition of Activision-Blizzard. Moreover, back in December 2022, the U.S. Federal Trade Commission lodged a complaint in an attempt to derail Microsoft's acquisition of Activision Blizzard. Needless to say, two heavyweights in two different countries are scrutinizing the deal.

UK's CMA is concerned about the deal's impact on cloud gaming. CMA expressed its concerns that if Xbox purchased Activision Blizzard, it would be able to dominate the cloud gaming market.

Microsoft could effectively control multiple elements such as subscription pricing and eventually alter the very structure of the gaming market. The company would be able to pull this off without facing opposition from other services as they wouldn't get to offer these popular games, feared the CMA.

Interestingly, Microsoft has addressed this very concern raised by the European Commission. In fact, Microsoft's promises to improve licensing conditions for cloud gaming played a crucial role in the decision.

Microsoft essentially offered to modify its licensing agreements, allowing users and any cloud gaming platforms to stream its titles without paying royalties for a decade.

Incidentally, Activision games are currently unavailable on cloud services. The EU accepted this remedial measure that would ensure healthy competition and eliminate the possibility of a monopoly, at least for a decade.

Interestingly, licensing commitments made by Microsoft could potentially expand the cloud gaming market and would bring several popular PC and console game titles to the emerging market. Now that the European Commission has consented to the deal, it is possible that UK's CMA and the US's FTC may soften their stand.