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The Activision Acquisition

The European Union (EU) has approved Microsoft’s proposed $69 billion acquisition of gaming company Activision Blizzard, subject to remedies offered by Microsoft. The EU’s decision comes after the UK’s Competition and Markets Authority (CMA) blocked the deal last month, citing concerns about reduced competition in the nascent cloud gaming market.

No Trust

To address antitrust concerns, Microsoft offered remedies in the area of cloud gaming, allowing users to stream Activision games they purchase on any cloud streaming platform.
Regulators globally have been examining whether the acquisition could distort competition in the console and cloud gaming market. The EU’s focus was on cloud gaming, as it has the potential to revolutionise the gaming industry by allowing users to stream games from servers instead of relying on dedicated hardware. Microsoft’s success in the cloud gaming market is crucial to its future strategy. The EU Commission found that the Activision takeover would not harm competition in the console market, where Sony’s PlayStation dominates.

Microsoft’s remedies to address competition concerns include allowing consumers who purchase Activision games to stream them on any cloud gaming platform of their choice. The company will also offer royalty-free licenses to cloud gaming platforms to stream Activision games if they are purchased by consumers. This move aims to increase competition in the market and provide broader access to Activision games for streaming platforms that previously did not have them.

A Win is a Win

The EU’s decision is considered a significant win for Microsoft, while the CMA’s blocking of the deal raised concerns about Microsoft’s ability to secure a dominant position in cloud gaming. Microsoft intends to appeal the CMA’s decision in the UK.

Despite the EU’s approval, Microsoft still faces challenges in convincing rivals such as Sony and other regulators, including the US Federal Trade Commission (FTC), that the acquisition will not harm competition. The FTC’s decision on the matter is still pending, and the EU has had close cooperation with the FTC throughout the process.

Overall, the EU’s approval of the Microsoft-Activision deal represents a milestone for the acquisition, with remedies offered in the area of cloud gaming to address antitrust concerns. The decision allows Microsoft to move forward with its plans to acquire Activision Blizzard and positions the company to expand its presence in the gaming industry, particularly in the growing field of cloud gaming.