Microsoft's $69bn Activision Blizzard takeover receives backing from EU

The EU has approved Microsoft's $69 billion bid to acquire Activision Blizzard, overcoming previous obstacles. This potential merger aims to make Microsoft the third-largest gaming company worldwide, behind Tencent and Sony. Antitrust concerns have been raised, particularly in the growing cloud gaming market.

The European Commission granted approval with conditions, requiring Microsoft to license Activision Blizzard games to competing cloud gaming services. This move aims to give millions of consumers the freedom to play these games on their preferred devices. The commission also addressed allegations by Sony, stating that Microsoft would not restrict access to the popular franchise.

However, the deal still faces challenges. Microsoft's appeal against the UK's Competition and Markets Authority (CMA) block is pending, and success in this appeal is crucial. The CMA rejected the bid due to concerns over reduced competition and options for British gamers in the cloud gaming market.

Legal challenges in the US also pose a hurdle. The Federal Trade Commission filed a lawsuit, citing Microsoft's previous acquisitions that aimed to monopolize game exclusivity.

This EU decision marks a significant difference between EU and UK regulators post-Brexit. Japan has already approved the acquisition, while the legal process in the US continues.

The rise in demand for cloud gaming has prompted companies like Microsoft to enter the market. Microsoft assures regulators that the merger will not harm competition and promises to grant access to Activision's games to an additional 150 million people. Deals with Nintendo, Nvidia, Boosteroid, and Ubitus have already been secured.

EU Competition Chief Margrethe Vestager emphasizes the importance of safeguarding competition and innovation. The decision aims to protect these aspects within the rapidly evolving gaming industry.

The outcome of Microsoft's appeal against the CMA's block in the UK will determine the future of the acquisition. Failure to gain approval in one country would prevent the merged company from operating there. Although the UK market is smaller, it remains significant due to Microsoft's widespread product usage, such as the Windows operating system.