Microsoft’s Activision Blizzard acquisition approved by EU regulators

Microsoft’s $68.7 billion deal to acquire Activision Blizzard has been approved by EU regulators just weeks after UK regulators blocked the acquisition. The European Commission has concluded that the deal can pass thanks to commitments from Microsoft related to cloud gaming.

The EU found that Microsoft “would have no incentive to refuse to distribute Activision’s games to Sony” and that “even if Microsoft did decide to withdraw Activision’s games from the PlayStation, this would not significantly harm competition in the consoles market.” But EU regulators, much like the UK, did find the acquisition could harm competition around the distribution of PC and console games through cloud gaming services.

The EU’s decision to approve this giant deal comes less than a month after UK regulators blocked Microsoft’s plans. The UK’s Competition and Markets Authority (CMA) blocked the deal over cloud gaming market concerns, stating that the acquisition could lead to “reduced innovation and less choice for UK gamers over the years to come.” Microsoft is appealing the decision.

Microsoft has spent the past few months trying to address regulators’ concerns around cloud gaming, with the deals convincing EU regulators but not the UK. The software giant signed cloud gaming deals with Boosteroid, Ubitus, and Nvidia to allow Xbox PC games to run on these rival cloud gaming services. A similar deal with Nintendo was announced in December. All of these 10-year deals also include access to Call of Duty and other Activision Blizzard games, if the deal is approved by regulators.

The CMA fears that Microsoft controlling Call of Duty, Overwatch, and World of Warcraft would give it a big advantage over competitors in the cloud gaming market — which the regulator estimates Microsoft has around 60 to 70 percent of global cloud gaming services share.

Microsoft’s appeal in the UK will likely take months before the process is complete. Today’s EU decision may help boost Microsoft’s chances of getting this giant deal over the line, but the company still faces battles in the US and UK. Regulators in Saudi Arabia, Brazil, Chile, Serbia, Japan, and South Africa have also all approved the deal. China, South Korea, New Zealand, and Australia are all still reviewing the deal.

Microsoft’s next big hurdle is regulatory scrutiny closer to home. The Federal Trade Commission sued to block Microsoft and Activision Blizzard’s deal late last year, and the case is still at the document discovery stage. An evidentiary hearing is now scheduled for August 2nd, so we’re still months away from knowing the outcome of the case.