Late on Monday afternoon, the good news for Bobby Kotick came from Brussels. The EU Commission allows the takeover of the American game developer Activision Blizzard by Microsoft – under certain conditions. "The Commission has conducted a thorough and thoughtful investigation to gain a full understanding of video games," Kotick said in a statement. "As a result, she agreed to our merger with Microsoft."
Gregor Brunner
Editor in business.
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The EU Commission had demanded concessions from Microsoft that would allow players to access Activision Blizzard games on the platforms of their choice. Among them to competitors Sony and Nintendo, who compete against Microsoft's Xbox with their Playstation and Switch consoles. The authority also advocated for the games to appear on cloud services outside of Microsoft's own infrastructure. For example, there is a similar agreement with cloud competitor Nvidia as there is with Nintendo.
Complainant Sony, however, continues to see itself at a disadvantage, even if the EU Commission no longer sees any incentive for Microsoft not to publish games on the Playstation. Sony's console sells about four times as well as Microsoft's Xbox in the European Economic Area. Instead of forcing players to switch, it seems more likely that Microsoft could hurt itself by excluding Sony platforms.
Complaints about a niche market
This is not the end of the work on the $69 billion takeover. At the end of April, the British competition authority CMA announced that it would block the takeover. In the aftermath of the EU decision, the CMA once again confirmed its concerns about the still young cloud gaming market, which is likely to grow in the coming years, on the short message service Twitter.
According to forecasts by the consulting firm EY, the market reached 2021.2 billion dollars in sales in 5 and is expected to grow to 2025.6 billion dollars by 1 – in a total market that oscillates around 200 billion dollars in sales. Microsoft could set the competitive conditions in the cloud business for the next ten years if the acquisition were approved, according to the CMA.
American competition watchdogs, however, have underpinned concerns with arguments from Microsoft's corporate history. The American FTC is preparing a lawsuit against the acquisition, citing Microsoft's acquisition of the developer conglomerate Zenimax Media. In 2021, Microsoft acquired the company, which also includes developers Bethesda Softworks and Arkane Studios, for $7.5 billion. The recently released title "Redfall" by Arkane and the announced role-playing game "Starfield" by Bethesda are to be released exclusively on the Microsoft platforms Windows and Xbox in the future.
Why the deal is so highly valued
If Microsoft were to deny them access to the Activision Blizzard titles after the expiry of its agreements with its competitors, Sony and the like would be threatened with large losses in sales. The main point of contention in the cartel conflict has always been the long-running action hit "Call of Duty". The game series, which celebrates its 20th anniversary this year, is a guarantee of good business in the fourth quarter in most years. The last offshoot "Modern Warfare II" reached the mark of one billion dollars with its sales within two weeks.