Very good news for Microsoft, although it comes at a somewhat difficult time. The decision of the European Union regulator was, without a doubt, one of the most anticipated, since together with that of the FTC it is one of those that affect a greater number of users, that is, a large market. But also, since the surprising decision of the CMA took place, many waited (we waited) to know if the European common space would act in the same way or, on the contrary, would amend the plan to the British regulator.
Let’s do a quick recap for context, and then we’ll see what the EU has said about Microsoft’s intentions. How you remember, about a year and a half ago Microsoft announced its plans to buy Activision-Blizzard Kingan operation with a spectacular volume, as is well indicated by the close to 70,000 million dollars that Redmond intends to disburse to acquire one of the most relevant studies in the video game sector.
At that time, the forecasts indicated that the operation would be completed, if there were any. nihil obstat of the regulators, by the end of 2022. However, and practically from the first moment, lThe furious reaction from Sony, and the enormous pressure exerted by the Japanese technology on the regulators, has caused the situation to drag on in a more than considerable way. Some regulators who, by the way, have seen how Sony acquired at least three studios during this period, Bungie a few weeks after Microsoft’s announcement, Savage Game Studios in August and Ballistic Moon last February without saying a word. And it seems that the company’s plans do not stop there.
In any case, it seemed that deep lobbying by Sony might delay, but not prevent, the acquisition. In addition, Microsoft has shown to pay close attention to what was indicated by the regulators that supervised the operation, in addition to actively working to mitigate fears in relation to the possible monopolistic intentions that could be hidden behind this operation, as has been proven during the last months, in which we have known of multitude of 10-year deals to bring Call of Duty and other Activision-Blizzard King titles to a plethora of platforms, from Nintendo to GeForce Now.
This, coupled with Sony’s clear dominant position in the video console market, suggested that regulators would eventually allow the deal, but then came April 26, the day the UK regulator, the CMA, published its decision. final about it, blockading the operation on British soil. A decision that was surprising not so much for its sense, but for the argument used to support it, since it stated that this acquisition could negatively affect the development of the nascent market for cloud gaming platforms.
This is surprising, I say, because Activision-Blizzard games have barely had a presence on cloud gaming platforms until now. Part of its catalog was available on GeForce Now when the service was in the testing phase, but the company decided to remove it from the NVIDIA platform when it ended. ABK has never had a close attitude towards cloud gaming platformsand I’m not saying this, it’s what Antonina Batova, head of strategic communications at Boosteroid, says, one of the cloud gaming platforms that has reached an agreement with Microsoft, and which recently expressed its deep disagreement with the CMA.
A disagreement that is perfectly understandable, and that comes from a cloud gaming service, which already puts us on the track that its knowledge of said market must be somewhat more complete and accurate than that of the British regulator, which It has proven something that my colleague Isidro already pointed out, quite rightly, a few months ago, and it is nothing other than the lack of knowledge, on the part of the regulators, of the markets they supervise, something that if you stop to think about it you will see that it is truly unfortunate, and gives rise to decisions such as the one adopted by the CMA, which has only been endorsed by Sonyclear.
In these circumstances, and given that many other regulators have already given the green light to the operation, eyes have focused on two regulators, the US FTC, whose management has been called into question in recent months, and the regulator of the European Union, whose final decision has been made public today. A decision that is summarized with the title of the communiqué: lThe Commission authorizes the acquisition of Activision Blizzard by Microsoft, subject to conditions.
The conditions mentioned by the regulator are none other than compliance, by Microsoft, of what you have committed to during the last months, both with the regulator itself and with the companies with which it has signed agreements, something that those from Redmond have already affirmed, actively and passively, that of course they plan to maintain. It is understandable, of course, that the EU includes this reminder in its pronouncement, but the reading that we must make of it is that the appropriate conditions are in place for the acquisition.
Now, I must admit that if something has caught my attention, it is something that we can find as soon as we start reading the statement, which opens with this paragraph:
«The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Activision Blizzard (‘Activision’) by Microsoft. Approval is conditional on full compliance with the commitments offered by Microsoft. The compromises fully address competition concerns identified by the Commission and represent a significant improvement for cloud gaming compared to the current situation.»
The end of this first paragraph is reinforced by a point mentioned a little later in it:
«Even without this transaction, Activision would not have put your games available to multiple game subscription services, as this would cannibalize individual game sales. Therefore, the situation for third-party providers of multi-game subscription services would not change after Microsoft’s acquisition of Activision.»
It is most curious that, while the British regulator considers that the acquisition would harm the future of cloud gaming platforms, that of the European Union reaches precisely the opposite conclusion, and that this does reflect the opinion shown by the cloud gaming sector itself. It seems, and I only say that it seems, that the CMA has consulted with a number of heads of companies in the sector quite close to zero.
And I do not want to leave this point, without including a quote, highlighted in the statement itself, about the result that the acquisition would have:
«Video games attract billions of users around the world. In a fast-growing and dynamic industry, it is crucial to protect competition and innovation. Our decision represents an important step in this direction, by bringing popular Activision games to many more devices and consumers than ever before thanks to cloud game streaming. The commitments offered by Microsoft will for the first time allow such games to be streamed on any cloud game streaming service, enhancing competition and growth opportunities.
Margrethe Vestager, Executive Vice President in charge of Competition Policy.”
So, to summarize, it seems that driving on the left is not the only thing they do backwards in the UK.
For the rest, the communication of the European Union also affirms that the acquisition nor will it have a negative impact on the video game and console market, as the rest of the regulators have also stated, including the CMA itself, therefore reaching the final conclusion that this operation not only does not have a negative impact on competition but, in fact, would contribute decisively to it.
