The European Commission this week approved Microsoft Corp.’s proposed acquisition of Activision Blizzard Inc.
The commission concluded that the acquisition would not harm rival consoles and rival multi-game subscription services. It added Microsoft would have no incentive to refuse to distribute Activision’s games to Sony. It cited the fact that in the EU, PlayStation consoles outsell Xbox consoles by 4-to-1. Finally, it concluded that if Microsoft withheld Call of Duty titles from the PlayStation, the title is less popular in the EU and Sony could leverage its market position to fend off the competition.
The decision is a stark contrast from the CMA and FTC rulings made prior to the EU decision.
The UK-based Competition and Markets Authority in Apr. blocked Microsoft from acquiring Activision Blizzard.
The CMA cited harm to competition from the merger due to Microsoft’s dominant market position in the cloud gaming market, incentive to increase the cost of Xbox Game Pass, reduced innovation and less choice for UK gamers.
Microsoft said it will appeal the decision.
The FTC in Dec. alleged harm to competitors and subscription services by allowing Microsoft to deny titles to rival hardware, manipulate Activision’s pricing, or change terms and timing to access to Activision’s content.
It citied Microsoft’s acquisition of ZeniMax in Mar. 2021 which allowed the company to secure exclusive release of new game IPs including Starfield and Redfall for Xbox.
The acquisition, which Microsoft expected to close in fiscal year 2023, would allow competitors to access to the popular first-person shooter franchise Call of Duty.
Microsoft in Jan. 2022 said it will acquire Activision Blizzard Inc. for $68.7 billion in an all-cash transaction.
The acquisition would propel Microsoft’s game business in console, PC, cloud, and mobile with franchises including Call of Duty, Warcraft, Diablo, Overwatch, and Candy Crush.
Microsoft planned to release Activision Blizzard titles to Xbox Game Pass, a monthly service that holds more than 25 million subscribers.