Despite opposition from the UK CMA, and the ongoing legal battle in the USA, the acquisition of Activision Blizzard takes a step forward as the European Commission has approved it now.
In a press release the EU Commission made it clear that initially, they did feel the deal could "harm competition" in the console and PC gaming space (including cloud gaming). However, after their "in-depth market investigation" they changed their mind and said Microsoft "would not be able to harm rival consoles and rival multi-game subscription services" but that Microsoft could still "harm competition in the distribution of games via cloud game streaming services and that its position in the market for PC operating systems would be strengthened".
So why are they approving it? Microsoft offered up these terms for cloud gaming for 10 years:
- A free license to consumers in the EEA that would allow them to stream, via any cloud game streaming services of their choice, all current and future Activision Blizzard PC and console games for which they have a license.
- A corresponding free license to cloud game streaming service providers to allow EEA-based gamers to stream any Activision Blizzard's PC and console games.
Once those were set the EU decided the commitments "fully address the competition concerns identified by the Commission and represent a significant improvement for cloud game streaming compared to the current situation".
The UK CMA are standing firm though, releasing a statement on Twitter in a small thread. To save you clicking around their statement says:
The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming.
The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector.
Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years.
They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale.
This is one of the reasons the CMA’s independent panel group rejected Microsoft’s proposals and prevented this deal.
While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.
We're still multiple months away from seeing what happens overall though, since the US FTC case is still pending.