Monday, May 15th 2023
EU Regulators Approve Microsoft's Activision Blizzard Acquisition
Microsoft's $68.7 billion deal to acquire Activision Blizzard has been approved by EU regulators today - rumors emerged late last week that the bloc's executive arm, the European Commission, would give the takeover bid a thumbs up this week, with early indications that May 15 would be the day of declaration. EU antitrust regulators have let the acquisition pass due to commitments/reassurances from Microsoft relating to the cloud gaming sector. This is in sharp contrast to the UK's Competition and Markets Authority (CMA) organization's judgment, who chose to block the deal in late April and have since added restrictions (as of late last week) via a new interim order.
EU antitrust regulators have found that Microsoft "would have no incentive to refuse to distribute Activision's games to Sony" and that "even if Microsoft did decide to withdraw Activision's games from the PlayStation, this would not significantly harm competition in the home gaming console market." But the European Union's competition regulators have found points of concern (much like the UK CMA's further investigations) and reckon that the segment could be disrupted in the area of cloud gaming services - on PC and console platforms. The body has received the promise of several remedies from Microsoft - these matters will be resolved through flexible terms - including a free license to consumers in EU countries that will grant stream access to "any cloud game streaming services of their choice" - with the ownership of Activision Blizzard PC and console titles (current and future). Cloud providers operating within EU markets will also be offered a free license to stream the Acti-Blizz library.
Microsoft has been busy making 10-year licensing deals with games distribution services and its competitors in recent times - for example Sony and Nintendo have been offered the Call of Duty franchise as part of a ten year agreement. Margrethe Vestager, executive vice president of competition policy at the European Commission states: "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. 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." Activision Blizzard has not licensed its library for distribution on cloud gaming services - the giant games publisher (and development) group prefers its current model of direct digital sales as well as physical product launches.
The USA government's Federal Trade Commission (FTC) is due to deliver its own verdict in August of this year - Microsoft is anticipating a blockage in its home nation - the FTC has long indicated that it does not approve of the proposed merger with Activision Blizzard.
Sources:
The Verge, Guardian UK
EU antitrust regulators have found that Microsoft "would have no incentive to refuse to distribute Activision's games to Sony" and that "even if Microsoft did decide to withdraw Activision's games from the PlayStation, this would not significantly harm competition in the home gaming console market." But the European Union's competition regulators have found points of concern (much like the UK CMA's further investigations) and reckon that the segment could be disrupted in the area of cloud gaming services - on PC and console platforms. The body has received the promise of several remedies from Microsoft - these matters will be resolved through flexible terms - including a free license to consumers in EU countries that will grant stream access to "any cloud game streaming services of their choice" - with the ownership of Activision Blizzard PC and console titles (current and future). Cloud providers operating within EU markets will also be offered a free license to stream the Acti-Blizz library.
The USA government's Federal Trade Commission (FTC) is due to deliver its own verdict in August of this year - Microsoft is anticipating a blockage in its home nation - the FTC has long indicated that it does not approve of the proposed merger with Activision Blizzard.
76 Comments on EU Regulators Approve Microsoft's Activision Blizzard Acquisition
"EU antitrust regulators have found that Microsoft "would have no incentive to refuse to distribute Activision's games to Sony" and that "even if Microsoft did decide to withdraw Activision's games from the PlayStation, this would not significantly harm competition in the home gaming console market."
This isn't even about the gaming console market, as if that is a unique market. Its about content you f*%)@ idiots.
Luckily this is MS, and it will fail. They're still going to lose the console battle to PS, even if they might have the sales numbers.
I suppose Microsoft can argue that there is no "real" exclusivity if they bring the game to other platforms "in the future", but we know how that goes...
It has to be said that MS indeed has moved forward to reduce at least the XBox vs PC exclusivity, but still.
According to MS this acquisition of Activision Blizzard is just the beginning. There are more planned.
Now they're just a juggernaut too wealthy to truly be stopped; No politiicans are 100% immune to "greasing of the gears" and you can rest assured that is what will happen. Either that or MS will just find a way to sell a slightly-crippled version in just the regions where they couldn't lobby hard enough to get their way. It will change very little and eventually they will just get their way by making too much friction for those places where they have to make legal concessions.
Microsoft is a distant third in the console space, and a distant second on PC and the reality is it'll likely exit the market if it can't grow either organically or through acquisitions.
Secondly, the reason why the EU here doesn't think Microsoft will preclude competition on other systems for existing properties is due to the GaaS heavy nature of Activisions catalogue and that Microsoft will gain advantage through offering the titles on Gamepass rather than necessarily restricting them, of which is further reinforced by Microsoft agreeing to enforceable actions to ensure access as such.
Now of course Microsoft won't cut off Sony right away, they're one of if not the biggest contributors to those 7 billion after all. But they'll start tightening the noose, bit by bit, promoting their own services like game pass and leaving everyone else behind.
If Microsoft was acquiring something like Red Hat I'd have concerns, a game publisher, not so much.
PS5 is clubbing Xbox like a baby seal.
Btw, 51 million game consoles have 16 GB GDDR6 with 10 GB to ~12 GB VRAM allocation.
Japanese game consoles are dominating
116 million PS4 / PS4 Pro
107 million Switch Microsoft has problems with creating a creditable handheld platform i.e. Google, and Nintendo has beaten Microsoft.
vs
63 million XBO / X1X
PS4 is clubbing XBO like a baby seal.
Real facts matter.
Valve's Steam has 120 million monthly active users. About 3 million Steam Decks.
vs
63 million XBO + 20 million XSX/XSS = 83 million units. XSX/XSS extends XBO install base.
Microsoft gaming is outgunned and out-matched by Sony or Nintendo.
Your narrative is not based on facts.
we need more games like Redfall
Windows 10/11 does NOT extend the XBO ecosystem due to major DRM differences and Xbox's direct near-metal access to hardware. The actual Xbox Series X game disc doesn't run on Windows 10 DirectX12U while the PS4 game disc runs on PS5.
Microsoft's Xbox Everywhere initiative is a con-job i.e. it's marketing BS without real substance.
Windows Store is substantially inferior to Xbox Store.
They're not the dominant store... yetThe size is overwhelmingly different, of course those also matter but Microsoft is a much bigger beast.