We’re reaching the business end of Microsoft’s huge heave to get its proposed $68.7 billion acquisition of Activision Blizzard approved, and earlier this week it took a big step forward when the EU Commission approved the deal. The EU regulator noted many of the same concerns about the nascent cloud gaming market as the UK’s Competition and Markets Authority (CMA), which has said it will block the deal, but was ultimately persuaded by the remedies Microsoft proposed.
Microsoft offered the following commitments, all with a 10-year duration:
- A free license to consumers in the EEA that would allow them to stream, via any cloud game streaming services of their choice, all current and future Activision Blizzard PC and console games for which they have a license.
- A corresponding free license to cloud game streaming service providers to allow EEA-based gamers to stream any [of] Activision Blizzard’s PC and console games.
The EU reckons these “fully address” concerns, and “represent a significant improvement for cloud game streaming compared to the current situation”.
Now Microsoft vice chair and president Brad Smith has filled-in the details on exactly what Microsoft has promised here. “The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services,” said Smith. “This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”
The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.May 15, 2023
The most interesting element here, apart from Smith conveniently forgetting to mention the time-limited nature of the agreements, is that Microsoft has clearly chosen to make this a global commitment when all the EU is concerned about is what goes on in the European Economic Area. This is of course because, despite all the early chat suggesting the biggest problem would be Call of Duty becoming a potential Xbox exclusive, the future of the cloud gaming market turned out to be the thing that really worried the regulators: And Microsoft still has several other regulators worldwide to please.
The CMA yesterday defended its decision to block the deal in front of UK MPs, saying it wouldn’t be “turning a blind eye to anti-competitive mergers”. Nevertheless its decision is being appealed, a process that could take any length of time and potentially see the deal re-referred to the CMA. Meanwhile in the US the Federal Trade Commission is suing to block the deal. So this is far from over.
Microsoft will be hoping that such a comprehensive license offering will assuage some of those doubts, though I can’t quite get over how short the commitment is. When we’re talking about the cloud gaming market ten years is nothing and, whatever Microsoft may say to get this deal over the line, leaves the company free to abandon these commitments in fairly short order. Microsoft is not one of the world’s biggest tech companies because it plays nice even if, in front of the regulators, it’s all sunshine and lollipops for the next decade.