In a significant development for the gaming industry, EU antitrust regulators are anticipated to greenlight Microsoft Corp’s $69 billion acquisition of Activision by May 15, according to sources familiar with the matter. The approval comes despite the UK Competition and Markets Authority’s (CMA) decision to block the deal late last month over concerns about the potential impact on competition in the cloud gaming sector.
The European Commission’s pending clearance is expected after Microsoft agreed to licensing deals with several cloud streaming rivals, including Nvidia, Ukraine’s Boosteroid, and Japan’s Ubitus. Microsoft has also struck a deal with Nintendo to bring Activision’s popular title, Call of Duty, to its gaming platforms should the acquisition be successful. U.S. distributor Valve Corp, which owns Steam, the world’s largest video game distribution platform, declined a contract, expressing trust in Microsoft.
The EU’s decision is expected to come a week ahead of the Commission’s set deadline of May 22, while the Commission itself has declined to comment on the matter.
The proposed acquisition of Activision Blizzard, one of the largest gaming companies globally, known for its popular titles like Call of Duty, Overwatch, and World of Warcraft, has been a topic of contention since it was announced. While Japan approved the takeover in March, the U.S. Federal Trade Commission is also seeking to block it.
The UK’s CMA rejected the deal last month after an extensive investigation. The authority voiced concerns that the acquisition could give Microsoft an unfair advantage in the rapidly growing cloud gaming market by making Activision’s games exclusive to its service. The CMA underscored that cloud gaming needs a free, competitive market to drive innovation and choice and that this is best achieved by allowing the current competitive dynamics in cloud gaming to continue to operate without regulatory intervention.
Despite the UK’s resistance, Microsoft remains undeterred. In response to the CMA’s decision, Microsoft stated, “We remain fully committed to this acquisition and will appeal. The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom.”
Should the EU clearance go through as expected, it will mark a significant step forward for Microsoft in its ambitious bid to acquire Activision. However, with the U.S. Federal Trade Commission still seeking to block the deal, the path to completion remains fraught with regulatory hurdles. The developments over the coming weeks will be closely watched by the global gaming industry and its millions of consumers.