Europe approves the purchase of Activision Blizzard King

Yes, the drama of the Activision purchase continues, but this time there is good news for Microsoft and Xbox because the European Commission approved the purchase of Activision Blizzard, which is contrary to what the great opponents of the deal have stated: the CMA of the United Kingdom. United States and the FTC of the United States. What does this mean? Is it time to celebrate? Will Xbox be able to lay claim to its brand new acquisition? We’ll tell you then.

Videos: Nightmare for Microsoft: they block the purchase of Activision Blizzard

THE EUROPEAN COMMISSION APPROVES THE PURCHASE OF ACTIVISION

The European Commission finalized the review process of the purchase of Activision Blizzard King by Microsoft and concluded that there is no risk of harm to the industry and to competitors in most cases, so there were sufficient elements to grant the expected approval.

According to the body that governs commercial relations and activities on the continent, with the exception of the United Kingdom, the preliminary analysis – that is, the agreement as it was when Microsoft and Activision announced it – did represent a risk in terms of distribution and availability of hardware and services. However, Microsoft put on the table the necessary remedies to balance the proposal and, at least in the European case and in the countries where it is approved, the Xbox company’s commitment was accepted. That means the wholesale 10-year deals were successful.

#EUMergerControl Commission ?? clears acquisition of Activision Blizzard ? by Microsoft, subject to conditions ?

? ➡️https://t.co/qG3D0jNfPo pic.twitter.com/Q3P2miYisH

—EU Competition (@EU_Competition) May 15, 2023

After an in-depth review of the acquisition and the remedies offered by Microsoft, the commission concluded that the North American company cannot harm rival video game consoles and services in the current state of the gaming industry. On the other hand, the situation in the nascent cloud market and Microsoft’s position on PCs with its Windows operating system is different, so adjustments were necessary.

THE COMMISSION REMOVES THE MASK OF PLAYSTATION

Let’s go first with what happens on consoles. According to the agency, there is no reason why Microsoft wants to make the Activision Blizzard catalog exclusive, in particular call of duty, because in the European market PlayStation has a 4 to 1 advantage over Xbox, so it makes no sense to withdraw a game or franchise from such a popular and successful console. Instead, the regulator thinks the business incentive is to keep Activision games on PlayStation, so fear not Jim, you’ll have your call of dutyif this progresses.

Now, no one is naive, and the commission recognizes the possibility that at some point Microsoft decides to keep the Activision catalog to limit it to Xbox. Here comes the surprise: this would not represent a future problem because the analysis of the case showed that call of duty it is not as popular in the European Economic Area as it is in other parts of the world. For this reason, the regulator concluded that a hypothetical exclusivity in favor of Xbox will not harm PlayStation in the European market and considered that the Sony brand has the catalog and the position to deal with it by its own means.

ARTICLE: PlayStation hit bottom: without Call of Duty there are no exclusives

In general terms, the European Commission recognized the advantage that PlayStation has in this market and concluded that Microsoft’s move is valid in competitive terms. The document reflects the regulator’s intention to balance the situation and confirms that the Sony brand will die without its beloved call of dutyalthough this is only a scenario, because for the moment, Microsoft maintains its commitment to ensure the permanence of the FPS in the consoles of the Japanese company.

Video: No Call of Duty, no PlayStation exclusives

SERVICES, PC AND THE CLOUD: STOP THERE, MICROSOFT!

Although the console does not see risks in terms of competition and actions that harm the consumer, the European Commission thought the opposite regarding the service, PC and cloud sectors, and that is where it was necessary to make important adjustments that can excite for its possible impact on other parts of the world.

To begin with, it is recognized that Activision Blizzard does not intend to bring its games to game services that allow downloads or that are limited to streaming from the cloud. The company is known to think this cannibalizes its sales, so no change in that stance is in sight any time soon.

“Activision Blizzard games can fuel the growth of cloud gaming and give Microsoft an advantage in services, PC and the mentioned sector that would cause competitive damage”

However, the commission points out that this can change at any time, in case the purchase of Microsoft is finally approved, so the Xbox company had to give in to some agreements. The regulator considers that the services and cloud sector in video games is young and tends to grow, in addition to having the potential to change the way millions of players play and that would give rise to a huge market. Activision Blizzard games can fuel this growth and give Microsoft a competitive edge in services, PC and cloud that would hurt. In this section, the possibility of the North American company taking advantage of its position to offer the best experience in its gaming ecosystem is recognized, while its competitors would have the same content but with lower quality.

How to solve it? Microsoft proposed agreements and remedies to avoid any situation that indicates monopoly. The European Commission reported that 10-year agreements are the right path and the good news is that they operate on license terms, in a move that benefits distributors and consumers. First, all players who purchase the license of an Activision Blizzard game on console and PC, let’s say the call of duty in turn or the new Devil, they will be able to run their games on any cloud streaming service of their choice and on any hardware with suitable operating system. In addition, the experience, content and quality are guaranteed to be the same in all cases.

In this sense, it is an automatic and free license that gives users the right to play the Activision Blizzard titles they have purchased on the platforms of their choice, so there will be no specific console, digital platform or service that have exclusivity over them. Better still, Brad Smith, president of Microsoft, reported that this automatic license will apply on a global scale, so for the next 10 years Activision Blizzard game licenses will be maintained everywhere.

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

—Brad Smith (@BradSmi) May 15, 2023

At the same time, it was reported that the same free license will apply to all cloud video game service providers in the European market, so Microsoft will make the Activision Blizzard catalog fully available so that all competitors can access it. and take advantage of it, according to their own business models. The United States company will have its offer with Xbox Game Pass, but it will not be able to take advantage of the deal that involves removing content from other services.

Having said this, the regulator said: “taking into account the market information, the Commission concluded that the proposed acquisition, modified by the commitments, would no longer raise competition concerns and, ultimately, would generate significant benefits for competition and consumers. . The Commission’s decision is subject to full compliance with the agreements under the supervision of an independent trustee who will be in charge of guaranteeing their application”.

BACK IN THE RING, MICROSOFT CAN STILL WIN

The approval of the purchase of Activision by the European Commission is pure oxygen for Microsoft, it is an elixir of life, a heart or any item that regenerates health when you are about to lose to a boss in a video game.

“This is good news for Microsoft, Xbox and Activision because it increases the chances of success with other regulators and provides arguments for their fight against the CMA in the UK and what is to come against the FTC in the US next summer”

Without losing dimension, it is good news for Microsoft, Xbox and Activision because it increases the chances of success before other regulators and provides arguments for their fight against the CMA in the United Kingdom and what will come against the FTC in the US in the summer. It is not time to throw the bells into flight yet, but the decision of the European regulator comes at a peculiar moment.

In recent days, the Prime Minister of the United Kingdom, Rishi Sunak, lashed out at the CMA, pointing out that its regulatory excesses could harm the intentions of economic development and presence in important sectors of the region. The blocking of the purchase of Activision was the straw that broke the camel’s back and the government proposed a reform to limit the scope of regulations on competition and markets when they are decisions that threaten the integration of the United Kingdom to very good economic proposals. This week, representatives of the CMA will meet with the authorities and there they will be questioned about the reason for the blockade.

In this way, not everything is said for Microsoft in its attempt to make the biggest deal in the history of video games a reality. The European Commission has taken an interesting step that has revealed the possibilities of development and expansion of gaming beyond the traditional models that have been maintained for decades and where the hegemony of Japanese hardware companies such as Nintendo and Sony reigns. There’s still a ways to go, but today, if you’re an Xbox fan, it’s time to stay hopeful.

What do you think about the arguments of the European Commission? Are you excited about agreements that guarantee your license use and its global application? Do you think Microsoft can still pull off the acquisition?

Do not forget to participate in the comments and continue here, at LEVEL UP.

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