In a significant development for the gaming industry, the European Union (EU) has recently given the green light to Microsoft’s $69 billion acquisition of Activision Blizzard. The EU’s antitrust regulator, the European Commission, approved the deal after Microsoft made commitments to protect competition in the market. This approval marks a major victory for Microsoft, granting the company access to a vast portfolio of popular video game franchises and establishing a strong presence in the mobile and esports sectors.
To address concerns regarding potential anti-competitive practices, Microsoft offered several commitments that played a crucial role in gaining the EU’s approval. These commitments include licensing Activision Blizzard games to competing cloud gaming services, providing developers with access to Activision Blizzard’s game development tools and technology, and promising not to use its market power to raise prices or stifle innovation.
Critics of the acquisition have expressed concerns about Microsoft’s potential dominance in the gaming industry. They fear that the company may exploit its newfound market power to increase prices or hamper innovation. In response, Microsoft has reiterated its commitment to maintaining healthy competition. The tech giant has emphasized its intention to continue licensing Activision Blizzard games to other platforms and invest in new game development.
Microsoft’s acquisition of Activision Blizzard signifies a strategic move to expand its gaming business and underscores the growing importance of the gaming sector within the technology industry. The approval from the EU is a significant milestone for Microsoft, bringing the company one step closer to completing the deal, which is anticipated to close in the second half of 2023.
The acquisition of Activision Blizzard would position Microsoft as the world’s third-largest gaming company, trailing behind Tencent and Sony. With popular franchises like Call of Duty, World of Warcraft, and Candy Crush under its belt, Microsoft would gain a valuable collection of highly sought-after titles. Furthermore, this acquisition would grant Microsoft an influential presence in the mobile gaming and esports markets, both of which have experienced substantial growth in recent years.
While regulatory approval in the EU has been secured, the acquisition is still subject to clearance from other jurisdictions, including the United States. The U.K.’s Competition and Markets Authority (CMA) previously blocked the deal due to concerns about reduced competition in the cloud gaming market. The CMA expressed apprehension that Microsoft might make Activision’s key games exclusive to its own cloud gaming platforms, giving them an unfair advantage. The CMA’s decision prompted them to collaborate with other global authorities, including the U.S. Federal Trade Commission (FTC), which is also investigating the acquisition.
Microsoft has consistently argued that the acquisition would benefit gamers and developers by fostering diversity and innovation in game development. The company has pledged to respect Activision’s creative independence and continue supporting its games on multiple platforms. Activision CEO Bobby Kotick welcomed the EU’s approval, highlighting the company’s commitment to expanding investments in European workers.
As Microsoft progresses towards finalizing the deal, the outcome of ongoing regulatory scrutiny in various jurisdictions will shape the future landscape of the gaming industry.
