Game on: Microsoft’s Activision Blizzard acquisition approved by EU, but there are challenges ahead

The European Union (EU) regulators have approved Microsoft’s $68.7 billion acquisition of Activision Blizzard, following the recent blockage of the deal by UK regulators. The approval from the European Commission is based on commitments made by Microsoft regarding cloud gaming. The EU concluded that Microsoft would have no incentive to withhold the distribution of Activision’s games from Sony, a competitor in the gaming industry. Additionally, even if Microsoft decided to withdraw Activision’s games from PlayStation, it would not significantly impact competition in the consoles market. However, similar to the UK regulators, the EU did raise concerns about potential competition issues related to the distribution of PC and console games through cloud gaming services. How Microsoft pacified the European Commission To address the competition concerns raised by the European Commission, Microsoft has offered remedies in the form of 10-year licensing deals. These licenses aim to enable the deal between Microsoft and Activision Blizzard to proceed. As part of these licensing deals, Microsoft has made commitments to provide certain rights and benefits to both consumers and cloud providers. **Also read:  UK blocks Microsoft's $69 billion Activision deal, regulators fear monopoly in cloud gaming** Consumers in EU countries will be granted a free license that allows them to stream all current and future Activision Blizzard PC and console games they have a license for, using any cloud game streaming service of their choice. This license will enable them to play these games on any device, using any operating system. In addition, cloud providers operating in EU markets will also receive a free license to stream Activision Blizzard games. It appears that the European Commission requested Microsoft to offer this automatic licensing arrangement and to apply this globally, extending these benefits to consumers and cloud providers worldwide. “Our decision represents an important step in this direction, by bringing Activision’s popular games to many more devices and consumers than before thanks to cloud game streaming,” says Margrethe Vestager, executive VP in charge of competition policy at the European Commission. “The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth.” What happened in the UK? The approval of the Microsoft-Activision Blizzard deal by the European Commission contrasts with the recent decision by UK regulators to block the acquisition. The Competition and Markets Authority (CMA) in the UK raised concerns about the impact on the cloud gaming market, expressing fears of reduced innovation and limited choice for UK gamers in the future. Microsoft has appealed the CMA’s decision. **Also read: Microsoft tells US court that its $69 billion Activision-Blizzard deal would greatly benefit gamers** In an effort to address regulatory concerns related to cloud gaming, Microsoft has been working to establish partnerships and deals. These include agreements with Boosteroid, Ubitus, Nvidia, and Nintendo to allow Xbox PC games to be accessible on competing cloud gaming services. These 10-year deals also involve access to Activision Blizzard games such as Call of Duty, contingent on regulatory approval of the Microsoft-Activision Blizzard deal. While these efforts convinced EU regulators, they did not sway the UK authorities. The challenges ahead for Microsoft The concerns raised by the UK’s CMA regarding Microsoft’s control over popular gaming franchises like Call of Duty, Overwatch, and World of Warcraft, and its potential dominance in the cloud gaming market, highlight the regulator’s stance on the deal. The CMA estimates that Microsoft currently holds a significant share of around 60 to 70 per cent in the global cloud gaming services market. **Also read: Call of Duty on Nintendo? Microsoft might agree to a 10-Year Call of Duty deal with Nintendo** Microsoft’s appeal process in the UK is expected to take several months to complete. The recent approval of the deal by the EU may provide some support to Microsoft’s efforts, but the company still faces challenges in the US and UK. Regulatory authorities in various countries, including Saudi Arabia, Brazil, Chile, Serbia, Japan, and South Africa, have approved the deal. However, reviews are still underway in China, South Korea, New Zealand, and Australia. The next major obstacle for Microsoft is the scrutiny it faces from regulators in its home country, particularly the Federal Trade Commission (FTC). The FTC filed a lawsuit to block the Microsoft-Activision Blizzard deal, and the case is currently in the document discovery stage, with an evidentiary hearing scheduled for August 2nd. The outcome of the case will not be known until later this year. While Activision Blizzard CEO Bobby Kotick expressed his appreciation for the EU’s approval and the company’s commitment to expanding its investments and workforce in the EU, the CMA stands by its position and the concerns it raised. Microsoft’s appeal battle with the UK’s CMA is expected to be challenging, despite any concessions the company may have made to secure approval from the EU. While the EU approval may have helped Microsoft’s position, it does not guarantee a favourable outcome with the CMA. The UK regulator has its own independent assessment and criteria for evaluating the deal, and it will thoroughly consider the potential implications for the UK gaming market. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.