The European Union (EU) gave its approval to Microsoft’s $69 billion acquisition of gaming giant Activision Blizzard. The decision comes just weeks after the United Kingdom’s merger regulator stunned the gaming industry by vetoing the deal. The EU’s analysis indicated that the acquisition would not harm competition, especially as Microsoft has made a commitment to allow cloud rivals to offer popular games like “Call of Duty” on their platforms for the next decade.
Margrethe Vestager, the EU’s antitrust chief, hailed the deal as “pro-competitive” and stated that it would provide a significant boost to the cloud-streaming market. She highlighted that cloud gaming currently accounts for only 1–3 percent of the entire gaming market and expressed optimism that this acquisition would “kickstart” its growth.
The EU’s decision diverges from negative judgments by the UK’s Competition and Markets Authority (CMA) and the U.S. Federal Trade Commission (FTC). The CMA’s decision showcased the UK’s emergence as a global watchdog post-Brexit, while the FTC attempted to block the deal last year.
Vestager addressed the disparity in conclusions between EU and UK regulators, attributing it to differing perspectives on the speed of development of the cloud-gaming market. “We agree that the cloud-streaming market is a promising market. We may disagree about the speed at which it will develop,” she explained, emphasizing that the EU envisions a longer development period for cloud gaming compared to the UK.
Despite the EU’s approval, Bloomberg Intelligence analyst Jennifer Rie suggests that it is unlikely to significantly alter Microsoft’s legal challenges against the FTC and the CMA. Rie points out that each jurisdiction has made its decision based on market conditions specific to their region, leading to potentially different conclusions regarding the antitrust impact of the deal.
In its defense, the European Commission asserted that its findings would benefit millions of European consumers by allowing them to stream Activision’s games through various cloud-gaming services operating in the EU region. The commission’s statement emphasized that these commitments would expand competition and consumer access, enabling smaller EU players and a wider range of devices to enjoy Activision’s games.
In contrast, the CMA argued that the deal would strengthen Microsoft’s dominance in the cloud-gaming market by granting it control over several leading games, including “Overwatch” and “World of Warcraft.” The UK watchdog concluded that without the merger, Activision would still be capable of offering games on cloud platforms in the future.
With the EU’s green light, Microsoft may find a bit of relief, but the ultimate outcome remains uncertain as the company navigates legal challenges in other jurisdictions, such as in the United Kingdom.
