Xbox’s Activision Blizzard Deal Approved by European Commission [IGN]

The European Commission announced on its website that it has approved the proposed acquisition under the EU Merger Regulation.

The EC reached similar conclusions as the UK’s Competition and Markets Authority (CMA) — that the deal would not harm the console market but could harm cloud gaming — but was satisfied with Microsoft’s proposed remedies for these concerns.

Improving the cloud gaming market.

Microsoft’s solutions appeared so effective to the EC that it now expects the deal will bring “significant improvement” to the cloud gaming market, a stark difference to the CMA’s conclusion that saw it block the deal last month.

“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,” said the European Commission’s statement.

Addressing its concerns that the deal going through would monopolise the sector, Microsoft has offered a 10-year licensing commitment for consumers in the European Economic Area (EEA). This commitment guarantees that Activision Blizzard games will not be locked to the Game Pass Ultimate or the Xbox Cloud Gaming platform.

Instead, any cloud steaming service will be permitted a free license to provide Activision Blizzard games to EEA 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.

Familiar concerns.

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

The Commission said it believes there is no incentive for Microsoft to refuse to distribute Activision Blizzard games to Sony since it’s the leading distributor of console games worldwide.

The EC went as far as to say that, if Microsoft did make the likes of Call of Duty exclusive to Xbox, Sony would still be able to go toe to toe with it. “Even if Microsoft did decide to withdraw Activision’s games from the PlayStation, this would not significantly harm competition in the consoles market,” the EC said.

Its reasoning is purely Europe-focused, however, with the example being that Call of Duty is less popular in the EEA than in other areas of the world.

As for cloud gaming, “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.”

Hearing Microsoft’s message.

Microsoft’s aforementioned solutions to these problems were seemingly heard (and believed) loud and clear by the EC. “They will empower millions of EEA consumers to stream Activision’s games using any cloud gaming services operating in the EEA, provided they are purchased in an online store or included in an active multi-game subscription in the EEA,” it said.

“In addition, the availability of Activision’s popular games for streaming via all cloud game streaming services will boost the development of this dynamic technology in the EEA. Ultimately, the commitments will unlock significant benefits for competition and consumers, by bringing Activision’s games to new platforms, including smaller EU players, and to more devices than before.”

This echoes a message that Microsoft has been putting forward for a long time: that it wants to make games more accessible and bring them to as many players as possible. Microsoft president Brad Smith reiterated both of these points in a subsequent tweet.

“The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services,” he said. “This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.

More work to be done.

The EC’s decision to approve Xbox’s acquisition of Activision Blizzard is a definite step forward for Microsoft but, headlined by the CMA’s decision to block the deal, there are still several hurdles for the company to overcome.

Microsoft is appealing the CMA’s decision, though this by itself is an incredible undertaking that will take months to overcome, if at all. The CMA has won 67% of merger appeals, and even if Microsoft gets the UK’s Competition Appeal Tribunal on its side, the deal will still has several more steps to go through before another decision is made.

It will also be scrutinised by the United States’ Federal Trade Commission, which sued to block the acquisition in December 2022, with a hearing set for August 2 this year.

Ryan Dinsdale is an IGN freelancer and acting UK news editor. He’ll talk about The Witcher all day.