On Monday, the European Union authorized Microsoft’s $69 billion acquisition of video game developer Activision Blizzard, concluding that the agreement won’t impede competition for well-known console games like Call of Duty and approving the American tech company’s solutions to increase competition in cloud gaming.
But because British regulators rejected it and American officials are working to undermine it, the landmark agreement is still in peril.
The agreement, which was made more appealing by Microsoft’s assurances to relax licensing requirements for cloud gaming, “would no longer raise competition concerns and would ultimately unlock significant benefits for competition and consumers,” according to the European Commission, the executive arm of the 27-nation bloc and top antitrust watchdog.
Regulators worldwide have been looking closely at the all-cash transaction that was announced more than a year ago due to concerns that it would give Microsoft and its Xbox platform ownership of popular Activision titles like Call of Duty and World of Warcraft.
Competitor Sony, which creates the PlayStation gaming system, has led a fierce opposition.
Microsoft agreed with Nintendo to license Activision games like Call of Duty for ten years to overcome the opposition.
If the arrangement were successful, Microsoft would also offer the same to Sony.
Following its examination, the European Commission ruled out the idea that Microsoft would stop selling its games to PlayStation, claiming that doing so would severely hurt its financial position.
Brussels gave the developing cloud gaming business more attention. Cloud gaming allows users to stream their games to tablets, phones, and other devices through a cloud platform that may charge a fee, saving them from purchasing expensive consoles and gaming computers.
The commission authorized the transaction after accepting Microsoft’s promise to change its licensing arrangements so that customers and any cloud gaming platforms could stream its titles without paying any royalties for ten years.
Microsoft has already announced agreements to offer Xbox PC titles to cloud gaming services run by Nvidia, a chip manufacturer, and Boosteroid, a third party.
Although cloud providers don’t offer Activision games, the commission highlighted that the licensing agreements might increase the market for cloud gaming “by bringing Activision’s games to the cloud.”
The EU’s judgment conflicts with the British antitrust authorities’ position, which was torn down last month over worries that the most significant tech merger in history will hinder competition in the niche but quickly expanding cloud gaming industry.
The businesses are pleading with the UK. The Competition and Markets Authority’s ruling was appealed to a tribunal, but the past is not encouraging.
The watchdog rejected Facebook parent Meta’s acquisition of Giphy due to worries that it would curtail competition and innovation.
After losing an appeal, the social media behemoth was ultimately forced to sell off the GIF-sharing platform.
In its battle with American regulators, the EU’s judgment may improve Microsoft’s chances.
The Federal Trade Commission is suing the corporation in court to prevent the transaction.
JOIN US ON WHAT'SAPP, TO GET INSTANT STATUS UPDATES AND BE IN THE KNOW.
CLICK HERE
