Microsoft’s $69 billion acquisition of publisher Activision Blizzard took a big step to the finish line when it received approval on Monday from European Union regulators.
The European Commission, the executive body of the EU, approved the deal on the condition that Microsoft addresses concerns it had regarding competition in the video game industry. According to the commission, Microsoft will need to allow gamers to stream any Activision Blizzard games, future and current, to any cloud gaming streaming service.
“Our decision represents an important step in this direction, by bringing Activision’s popular games to many more devices and consumers than before thanks to cloud game streaming,” Margrethe Vestager, executive vice president in charge of competition policy, said in a statement. “The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth.”
Microsoft first announced its plans to acquire Activision Blizzard in January 2022. Closing the deal would put the Xbox maker into the top three video game publishers right behind its rival Sony. Activision Blizzard is one of the largest third-party publishers with some major franchises including Call of Duty, Candy Crush and Overwatch, which would give a much-needed boost to Microsoft’s games catalog.
While the EU is a huge win for Microsoft, it still has a few more hurdles to clear before the deal is done.
Who’s left to approve the deal?
Microsoft still has to receive approval from regulators in the US. The Federal Trade Commission filed a lawsuit in December to challenge the acquisition, saying the deal would “enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription and cloud-gaming business.”
A hearing for the lawsuit is set for Aug. 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 has continued to deny the deal would hamper competition within the video game industry and continues to negotiate with regulators in order to get approval.
What does this deal mean for gamers?
For Xbox Game Pass subscribers, the deal means Activision Blizzard’s catalog of games will be incorporated into the service, likely similar to how Bethesda games were when Microsoft acquired that company in 2020.
How gamers who don’t have an Xbox, and instead use a Sony PlayStation or Nintendo Switch console, will be impacted is less clear. Critics of the deal are concerned that Microsoft could make future games developed by Activision unavailable on rival consoles. (Microsoft did just this for game developed by Bethesda.) This is especially concerning for a major Activision title like Call of Duty.
Microsoft already agreed to a 10-year deal with Nintendo to bring Call of Duty games to its consoles, but Sony reportedly rejected a similar agreement. Sony remains against the deal and continues to submit filings to regulators about its concerns over the acquisition.
What is cloud gaming?
Cloud gaming is the technology to stream video games remotely to a device such as a phone, tablet or smart TV. While the technology has been around for more than a decade, it’s only in recent years has it really taken off thanks in part to it being an added feature for Microsoft’s Xbox Game Pass and Sony’s PS Plus.
Other companies developed their own cloud gaming services, such as Amazon’s Luna and GeForce Now. The former made an agreement with Microsoft in February to bring more of its games to the service over the course of the next 10 years.