Microsoft’s $69 billion acquisition of publisher Activision Blizzard took a huge step to the finish line when it received approval Monday from European Union regulators.
The European Commission, the European Union’s executive body, agreed to the deal on the condition that Microsoft address its concerns about competition in the video game industry. According to the commission, Microsoft will need to allow players to stream any Activision Blizzard games, both future and current, to any cloud game streaming service.
“Our decision represents an important step in that direction, by bringing popular Activision games to more devices and consumers than ever before thanks to cloud game streaming,” Margrethe Vestager, executive vice president responsible for competition policy, said in a statement. “The commitments made by Microsoft will allow games like this to be streamed for the first time on any cloud game streaming services, boosting competition and growth opportunities.”
Microsoft first announced its plans to acquire Activision Blizzard in January 2022. Closing the deal would put the Xbox maker in the top three video game publishers right behind rival Sony. Activision Blizzard is one of the largest third party publishers with some major franchises including Call of Duty, Candy Crush and Overwatch, which should give a much needed boost to Microsoft’s game catalog.
While the European Union is a huge win for Microsoft, it still has some other hurdles to clear before a deal can be completed.
Who is left to agree to the deal?
Microsoft still has to get approval from US regulators. The Federal Trade Commission sued in December to challenge the acquisition, saying the deal would “enable Microsoft to suppress competitors to its Xbox game consoles and rapidly growing subscription and cloud gaming business.”
A hearing for the lawsuit is set for August 2.
In April, the Competition and Markets Authority blocked the $69 billion deal, saying it would lead to higher prices and fewer options for players.
Microsoft continues to deny that the deal will hinder competition within the video game industry and continues to negotiate with regulators in order to gain approval.
What does this deal mean for players?
For Xbox Game Pass subscribers, the deal means that Activision Blizzard’s catalog of games will be integrated into the service, likely similar to how Bethesda games were when Microsoft acquired that company in 2020.
It’s unclear how players who don’t have an Xbox, and use a Sony PlayStation console or Nintendo Switch instead, will be affected. Critics of the deal worry that Microsoft may make future games developed by Activision unavailable on competing consoles. (Microsoft only did this for a game developed by Bethesda.) This is especially true for a major Activision title like Call of Duty.
Microsoft has already agreed to a 10-year deal with Nintendo to bring Call of Duty games to its consoles, but Sony has reportedly rejected a similar agreement. Sony remains against the deal and continues to file filings with regulators over its acquisition concerns.
What are cloud games?
Cloud gaming is a technology for remotely streaming video games to a device such as a phone, tablet, or smart TV. While the technology has been around for more than a decade, it has only taken off in recent years thanks to it being an add-on for Microsoft’s Xbox Game Pass and Sony’s PS Plus.
Other companies have developed their own cloud gaming services, such as Amazon’s Luna and GeForce Now. The former entered into an agreement with Microsoft in February to bring more of its games into the service over the next 10 years.
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