Xbox’s Activision Blizzard Deal Approved by European Commission

Microsoft’s acquisition of Activision Blizzard has been approved by the European Commission. The approval brings Microsoft’s historic deal one step closer to completion.

The European Commission announced on its website that it has approved the propsed acquisition under the EU Merger Regulation. The EC’s agreement does comes with conditions, however, that will require “full compliance” from Microsoft.

Unlike the UK’s Competition and Markets Authority, which moved to block the deal last month after deciding it would have a negative impact, the EC said the deal would improve the cloud gaming market.

“The commitments [offered by Microsoft] fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation,” reads the European Commission’s statement.

Those conditions are related to cloud gaming, which – like the UK’s CMA – the European Commission had concerns about. In order to prevent a monopoly situation in the sector, Microsoft has offered a 10-year licensing commitment for consumers in the European Economic Area. This commitment guarantees that Activision Blizzard games will not be locked to the Game Pass Ultimate/Xbox Cloud Gaming platform. Instead, any cloud steaming service will be permitted a free license to provide Activision Blizzard games to EAA users on their platform. In addition, EEA consumers will be granted permission to stream all current and future Activision Blizzard games they own a license for on any cloud gaming service of their choice.

These final conditions were drawn up after an in-depth market investigation by the Commission, who concluded that ” Microsoft would not be able to harm rival consoles and rival multi-game subscription services,” but that the take-over could harm competition in the cloud game streaming services sector.

The Commission notes that it believes there is no incentive for Microsoft to refuse to distribute Activision games to Sony, since Sony is the leading distributor of console games worldwide. It does note that even if Microsoft does make Activision games exclusive to Xbox consoles, this would not significantly harm competition. Its reasoning is purely Europe-focused, with the example being that Call of Duty is less popular in the EEA than in other areas of the world, and so would not be a massive dent to Sony in the region if it became an Xbox exclusive franchise.

But when it comes to cloud gaming, the Commission believes that the acquisition could harm the sector’s growth. “The Commission found that the popularity of Activision’s games could promote [cloud game streaming] growth. Instead, if Microsoft made Activision’s games exclusive to its own cloud game streaming service, Game Pass Ultimate, and withheld them from rival cloud game streaming providers, it would reduce competition in the distribution of games via cloud game streaming.”

Developing…