Microsoft’s acquisition of Activision Blizzard for $69 billion took an important step towards completion when European Union regulators approved it on Monday.
Microsoft agreed to the terms of the contract, but only if Microsoft addressed its concerns regarding the competition within the video gaming industry. Microsoft is required to let gamers stream future or current Activision Blizzard video games to cloud gaming services, as per the EU Commission.
Margrethe vestager, executive Vice President in charge of Competition Policy, stated in a press release that “our decision is an important step forward, bringing Activision’s popular games on to many devices and consumers more than ever before, thanks to cloud gaming streaming.” Microsoft has committed to enabling the streaming for cloud-based game streaming for the very first time. This will enhance competition and create growth opportunities.
Microsoft announced in January 2022 that it planned to buy Activision Blizzard. Microsoft would move up to the second spot of video game publishers if the deal was closed. Sony is the number one. Activision Blizzard has some of Microsoft’s most important franchises such as Candy Crush, Overwatch and Call of Duty.
Microsoft has yet to complete the transaction, despite the EU being a major win.
What’s the last person to approve this deal?
Microsoft must still receive regulatory approval in the US. In December, the Federal Trade Commission sued to stop the acquisition. The lawsuit claimed that the purchase would allow Microsoft to “suppress competitors of its Xbox gaming consoles as well as its rapidly-growing subscription and cloud gaming business.”
The hearing is scheduled for August 2.
In April, the Competition and Markets Authority blocked the $69 billion deal, saying it would result in higher prices and fewer choices for gamers.
Microsoft continues to insist that the agreement will not hamper the competition in the video games industry. It also negotiates with regulators to gain approval.
What is the significance of this agreement for players?
Xbox Game Pass customers will have Activision Blizzard games added to the service. This is similar to the way Bethesda’s games were included when Microsoft has acquired this company by 2020.
Less clear is how this will affect gamers who do not own an Xbox and use Sony PlayStation or Nintendo Switch. Microsoft’s deal with Activision could prevent future Activision games from being released on competing consoles, according to critics. Microsoft did exactly this with a game created by Bethesda. It is particularly concerning when it comes to a Call of Duty title from Activision.
Microsoft and Nintendo have already reached a 10-year contract to deliver Call of Duty titles to Nintendo consoles. Sony has, however reportedly turned down a similar arrangement. Sony remains against the deal and continues to submit filings to regulators about its concerns over the acquisition.
Cloud gaming is a new phenomenon.
Cloud gaming allows video games to be streamed remotely from a mobile phone or tablet to an electronic device like a smart TV. Although the technology dates back more than a decade it was only in recent times that it became popular, thanks in large part to its inclusion in Microsoft’s Xbox Game Pass as well Sony’s PS Plus.
Amazon Luna, GeForce Now and other companies have developed cloud gaming services. In February, the former signed an agreement with Microsoft to add more games to its service in the coming 10 years.
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