The European Union agrees with Microsoft’s plan to buy Activision Blizzard for $69 billion.
Microsoft’s $69 billion offer to buy Activision Blizzard has been approved by the European Union (EU). This is a big step forward for a deal that had been stopped by the British competition regulator and is still being fought in the US. This possible deal could be the biggest one in the history of the gaming business.
Microsoft, which makes Xbox, made a big offer for Activision Blizzard because it wanted to become the world’s third-largest gaming company by income, after China’s Tencent and Japan’s Sony, which makes PlayStation. Antitrust concerns were made by the merger, especially about how it would affect competition in the fast-growing cloud gaming market.
The EU’s powerful trade body, the European Commission, has given its approval, but with some conditions. It said that the permission would only be given if Microsoft kept all of the promises it had made. The commission thinks that these promises do a good job of addressing the competition concerns that have been brought up and will lead to a big improvement in cloud gaming.
One of the most important conditions set by the European Commission is that Microsoft must automatically license famous Activision Blizzard games to cloud gaming services that compete with it. Millions of people around the world will be able to play these games on the gadgets they prefer because of this rule. Sony had said that the deal would give Microsoft the power to limit access to the popular franchise, but the commission’s ruling shows that Microsoft will be required to send Activision’s games to Sony.
But the purchase is not yet a sure thing. Microsoft’s appeal against the block put in place by Britain’s Competition and Markets Authority (CMA) is still being heard, and experts say that if Microsoft wins this appeal, the deal can go forward. The CMA turned down the bid because they were worried that it could hurt competition in the rapidly growing cloud gaming market, which could mean that British players would have less options.
Also, the deal could be stopped by the law in the United States. Last year, the Federal Trade Commission filed a case to stop the purchase. They did this because Microsoft had bought up smaller gaming companies in the past to get exclusive rights to games.
The EU’s move is the first big difference between EU and UK rules since the UK left the EU. Even though Japan has already given its approval, the deal is still being challenged in court in the US.
Cloud gaming is becoming more and more popular, which has made tech companies like Microsoft want to get a piece of this growing market. By using cloud-based systems, users can access games through subscriptions and virtual means, letting them play on different devices like smartphones and tablets.
Microsoft has said that the merger won’t hurt competition and has guaranteed that 150 million more people will be able to play Activision’s games. The company has already made deals to bring famous games like “Call of Duty” to platforms like Nintendo consoles and cloud game streaming services from Nvidia, Boosteroid, and Ubitus.
In an industry that changes so quickly, EU freedom Chief Margrethe Vestager stressed how important it is to protect freedom and new ideas. She said that the decision by the EU was a big step in the right way.
The future of the deal will depend on how Microsoft’s appeal against the block put in place by the CMA in the UK turns out. If the takeover isn’t okayed by officials in one country, the merged company won’t be able to do business in that market. Even though the UK market is smaller than those in the EU and the US, millions of people use Microsoft goods, like the Windows operating system, which is used everywhere.