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EU gives OK to $69B Microsoft deal to buy Activision

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The European Union on Monday approved Microsoft’s $69 billion ($93 billion in Canadian dollars) acquisition of video game maker Activision Blizzard, a deal that will boost competition for popular console titles like Call of Duty. Decided not to impede and accepted bailouts from U.S. tech companies to boost competition. cloud game.

But the blockbuster deal is still in jeopardy, with British regulators rejecting the deal and US officials trying to block it.

The acquisition was further lucrative by Microsoft’s promise to automatically license Activision games to its cloud gaming platform, saying it would “no longer cause competitive concerns and ultimately provide significant benefits to competition and consumers.” ,” said the European Commission, the bloc’s executive arm and head of the antitrust watchdog.

Liam Dean, a games industry analyst at a technology research and advisory firm, said the European Commission’s approval “removes one major potential stumbling block to this deal”, but that overturning the UK’s refusal would “remove the UK’s It doesn’t necessarily mean that they are in a stronger position.” Omdia.

An all-cash deal announced more than a year ago has given Microsoft and its Xbox console control over Activision’s hit series like Call of Duty and World of Warcraft, raising fears. Since then, it has been under scrutiny by regulatory authorities around the world.

Fierce opposition has been sparked by rival Sony, which makes the PlayStation game system.

Microsoft tried to counter resistance by signing a 10-year deal with Nintendo to license Activision titles such as Call of Duty, and offering the same license to Sony if the deal went through.

After a review, the European Commission ruled out the possibility of Microsoft cutting games from PlayStation, saying leaving out the most popular console would hurt profits.

A screenshot from the 2013 game Call of Duty: Ghosts appears. This game franchise is his one of Activision Blizzard’s biggest titles. (Activision/Infinity Ward/AP Communications)

The emerging cloud gaming market came under heavy scrutiny from Brussels. Cloud gaming eliminates the need to purchase expensive consoles or gaming computers by allowing players to stream their games to tablets, mobile phones, and other devices through a cloud platform that typically costs money.

The committee accepted Microsoft’s offer to change the licensing agreement to allow users and the cloud gaming platform to stream titles without paying royalties for 10 years, and approved the deal.

Microsoft president Brad Smith said in a statement that the license “applies globally, allowing millions of consumers around the world to play these games on the device of their choice.”

Microsoft has already announced a deal to bring Xbox PC games to the cloud gaming platform run by chipmaker Nvidia and independent company Boosteroid.

Although Activision’s games are not available on cloud services, the Commission believes that the licensing agreement “will allow Activision’s games to reach new platforms, including smaller players in the EU, and more devices than ever before” in the cloud gaming market. pointed out that it is possible to expand

Accord faces more hurdles

The EU’s decision could help Microsoft’s chances of confronting US regulators, who are taking the company to court with the Federal Trade Commission seeking an injunction. The trial by the FTC’s in-house judge is scheduled to begin on August 2.

But the Brussels approval is at odds with the stance of UK antitrust regulators, who overturned the biggest tech deal in history last month over fears of hurting competition in the small but burgeoning cloud gaming market.

Britain’s Competition and Markets Authority said in a statement on Monday that it “supports the decision”, an unusual move that highlights London’s stronger approach.

“Microsoft’s proposal, accepted today by the European Commission, will allow Microsoft to set the terms of trading for this market for the next decade,” said the agency’s chief executive Sarah Cardell. “They will replace a free, open and competitive marketplace with one subject to ongoing regulation of the games Microsoft sells, the platforms it sells to and the terms of sale.”

Both companies have appealed the UK decision to court, but history doesn’t bode well.

The watchdog had previously denied Facebook parent company Meta’s acquisition of Jiffy, citing concerns that it would limit innovation and competition. The social media giant was ultimately forced to sell its GIF-sharing platform after losing a lawsuit.

Games analyst Dean said that if Microsoft’s appeal fails, the company will have to either cancel the deal or carve out the UK as a separate market, an unfeasible option. said to appear to be

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