European Commission Approves Microsoft’s Acquisition of Activision Blizzard with Conditions

The European Commission has given its approval for Microsoft's acquisition of Activision Blizzard, subject to certain conditions. This decision follows a comprehensive investigation into the proposed merger, considering feedback from various stakeholders. The Commission's main concern was the potential impact on competition in the distribution of video games and cloud gaming services. However, Microsoft's commitments have addressed these concerns, promising significant improvements in the field of cloud gaming.

Competition Concerns and Investigation

The European Commission conducted a detailed investigation into the potential consequences of the acquisition. It identified two areas of concern: the distribution of console and PC video games, including multi-game subscription services and cloud gaming, and the supply of PC operating systems. The investigation found that Microsoft's position in the market for PC operating systems would be strengthened, potentially harming competition.

Cloud Gaming and Impact on Competition

The Commission concluded that Microsoft's acquisition of Activision Blizzard would not harm rival consoles and multi-game subscription services. However, it highlighted the potential negative impact on the distribution of games through cloud gaming services. Cloud gaming has the potential to transform the gaming industry, but it remains limited in its current state. The popularity of Activision's games could drive the growth of cloud gaming. If Microsoft were to make Activision's games exclusive to its own cloud gaming service, Game Pass Ultimate, and withhold them from rival providers, it would undermine competition in this emerging sector.

Commitments to Address Concerns

To alleviate these concerns, Microsoft has offered comprehensive licensing commitments. The company will provide a free license to consumers in the European Economic Area (EEA) to stream all current and future Activision Blizzard PC and console games through any cloud gaming service of their choice. Additionally, cloud gaming service providers in the EEA will receive a corresponding free license to allow EEA-based gamers to stream Activision Blizzard's games.

These licensing commitments are a significant step toward addressing competition concerns and promoting cloud gaming. EEA consumers who have purchased Activision games or subscribed to multi-game services will have the right to stream those games using any cloud gaming service on any device and operating system. This will ensure a seamless gaming experience across different platforms. Furthermore, the availability of Activision's popular games for streaming through all cloud gaming services will foster innovation and competition within the EEA market.

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