Microsoft is one step closer to officially acquiring Activision Blizzard, although it still has to deal with the U.K.’s CMA (Competition and Markets Authority) that blocked the deal last month. The European Commission has approved the acquisition, according to a press release on its website, conditional on full compliance with the commitments offered by Microsoft. Contrary to what the U.K.’s CMA said however, the European Commission noted that “The commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation.” The CMA argued that the merger could make Microsoft even stronger in cloud gaming, possibly stifling competition in the growing market.
In its market investigation, the Commission indicated that Microsoft “would not be able to harm rival consoles and rival multi-game subscription services,” but did note that “Microsoft could 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.”
For those who only care about the supposed console war that exists, the Commission noted that Microsoft “would have no incentive to refuse to distribute Activision’s games to Sony, which is the leading distributor of console games worldwide, including in the European Economic Area (“EEA”) where there are four Sony PlayStation consoles for every Microsoft Xbox console bought by gamers.” That’s an interesting note, confirming that PlayStation is outselling Xbox 4:1 in Europe. The Commission then goes on to say that even if Microsoft did decide to make Activision’s games exclusive to Xbox, the move “would not significantly harm competition in the consoles market.” Part of this reasoning is because Call of Duty is less popular in the EEA than in other regions of the world.
The Commission was more concerned about cloud game streaming services, suggesting that if Activision’s games were made exclusive to Game Pass Ultimate, it could reduce competition in the distribution of games via cloud game streaming. As a result, here are the proposed remedies that Microsoft must commit to:
To address the competition concerns identified by the Commission in the market for the distribution of PC and console games via cloud game streaming services, Microsoft offered the following comprehensive licensing commitments, with a 10-year duration:
- 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.
Today, Activision Blizzard does not license its games to cloud game streaming services, nor does it stream the games itself. These licenses will ensure that gamers that have purchased one or more Activision games on a PC or console store, or that have subscribed to a multi-game subscription service that includes Activision games, have the right to stream those games with any cloud game streaming service of their choice and play them on any device using any operating system. The remedies also ensure that Activision’s games available for streaming will have the same quality and content as games available for traditional download.
So once again, Xbox vs. PlayStation isn’t at the center of the acquisition, and it likely never will be except to gamers who want to make a fuss about the console wars.
