Microsoft's Acquisition of Activision Approved by the EU: Impact on Gaming Industry and Licensing Agreements

Microsoft's proposal to offer free 10-year licensing agreements to European consumers, along with cloud game streaming services for Activision's PC and console games, played a crucial role in obtaining approval from the European Union.

Microsoft has received the green light from the European Union (EU) for its acquisition of Activision, a deal worth $69 billion.

The EU's approval follows the earlier rejection of the takeover in the UK. However, Microsoft managed to address the concerns of EU regulators by committing to providing free 10-year licensing agreements to gamers and cloud streaming competitors.

This move by Microsoft has been hailed as promoting competition and is anticipated to have a substantial impact on the cloud game streaming industry. The decision by the European Commission aligns with a previous report by Reuters in March.

During a press conference, Margrethe Vestager, the chief antitrust official of the European Union, publicly endorsed the deal and underscored the practicality and efficacy of the licensing agreements. She emphasized their significant impact in enhancing the environment for cloud game streaming, ultimately fostering a pro-competitive landscape.

“The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth,” EU antitrust chief Margrethe Vestager said in a statement on Monday.

Microsoft's proposal to offer free 10-year licensing agreements to European consumers, along with cloud game streaming services for Activision's PC and console games, played a crucial role in obtaining approval from the European Union.

By granting access to Activision's extensive collection of games through cloud streaming services, Microsoft seeks to transform the gaming industry, enabling players to enjoy their favorite titles on multiple platforms. Microsoft emphasizes that these 10-year licensing agreements provide stability and long-term advantages for gamers and cloud streaming providers alike, fostering innovation and competition in the market.

Given Activision's well-established franchises and popular game titles like Call of Duty, World of Warcraft, and Candy Crush, Microsoft's interest in acquiring Activision appears justifiable. Such an acquisition would enhance Microsoft's presence in the gaming industry, solidifying its Xbox platform and gaming services.

It's important to note that the regulatory approval procedures for significant acquisitions can differ across jurisdictions, and various antitrust authorities may have varying perspectives and criteria. These differences could potentially explain the contrasting outcomes between the hypothetical scenario of the US and UK's rejection and the EU's approval.