Microsoft’s $69 Billion Cloud Gaming Remedy Wins European Union Approval

The gaming company called Activation Blizzard was the target of Microsoft’s planned 69 million dollar charge, which was accepted by European Union regulators on Monday. Subject to remedies specifically offered by the U.S. tech giant. The Eu’s executive arm, The European Commission mentioned how Microsoft offers remedies in the budding zone of cloud gaming that has fought antitrust concerns.

With this new technology, users will be able to stream the activation game they have purchased from any cloud streaming platform thanks to Microsoft’s promised remedies.

The reason why European’s approval is crucial is due to the previous blockage Microsoft has faced from the UK’s top competitors’ authority.

Just after the positive news of approval made its way into the headlines, people are concerned about what the console and gaming market would look like. 

This approval may now spike competition among the rest of the players in the market as Activation does retain the capability to turn it upside down. 

But why is activation such a game-changer? That’s because it’s behind some of the major PC and console games in the world. 

The Microsoft-Activision deal will undoubtedly benefit the players. One of the most significant implications of the acquisition is that Microsoft now controls a vast library of games, including some of the best-known titles in the world. 

These games, which include Call of Duty, World of Warcraft, Diablo, and Candy Crush, generate substantial revenue for Activision Blizzard. However, gaming enthusiasts can expect even greater benefits from the acquisition, such as improved game quality, access to exclusive content, and enhanced gaming experiences.

Microsoft is known to invest heavily in gaming technology and has been on an expansion spree in recent years. Following its acquisition of ZeniMax Media in March 2021, the owner of leading game developers like Bethesda and id Software, Microsoft is fast becoming a top gaming company that spans console and PC gaming, mobile gaming, and cloud gaming. 

With an expansive gaming network, Microsoft can introduce new and innovative platforms capable of supporting vast communities of gamers worldwide. The company’s acquisition of Activision Blizzard will undoubtedly benefit gamers through cross-play functionality, enhanced live services, and improved game graphics.

The Microsoft-Activision deal is a win for the gaming industry. The gaming industry has seen tremendous growth in the past decade, with an estimated worth of $300 billion in 2021 alone. 

However, with this growth have come significant challenges, such as predatory microtransactions and low-quality games. By acquiring Activision Blizzard, Microsoft can consolidate its leadership role, regulate quality control and interventions, and introduce valuable development mechanisms for the broader gaming industry.

The action, according to a senior official at the European Commission, will increase competition in the industry and enable streaming services that previously lacked access to Activision titles to do so now.

But what was the reason for the UK to hold back on approving Microsoft, the Uk competitor and the market authority decided to block the deal over the concerns of lack of competition in the growing marketing of cloud gaming platforms. To which the CMA replies that this approval will cost no harm to the development and growth of the market. Although it wasn’t only the Uk that was against the approval other tech giants including Sony (play station gamer console) Was also against this approval. 

Before the EU judgment, Microsoft tried to ease the commission’s worries about making Activision games exclusive. After meeting with EU representatives in February, Microsoft President Brad Smith said that the tech giant would add Xbox PC titles to Nvidia’s cloud gaming service. The chip manufacturer objected to the deal.

Microsoft Cloud gaming experience 

Before the EU decision, Microsoft made an effort to allay the commission’s concerns about keeping Activision games exclusive. The tech giant announced in February that it would add Xbox PC titles to Nvidia’s cloud gaming service after President Brad Smith met with EU regulators. According to reports, the chip manufacturer had voiced objections to the purchase.

After a thorough investigation from the European Union, it was confirmed that the activation approval will not harm the rest of the market’s growth and development as Sony already holds dominance with its PlayStation. 

Cloud gaming would enable users to efficiently stream games from servers, doing away with the requirement for pricey specialized hardware like consoles. On already available devices like TVs, smartphones, and computers, these games may be played. For instance, a user might stream a game they purchased online via a cloud gaming service.

However, a sizable library of games that players might immediately access via a subscription service, similar to Netflix, will also be essential to the success of cloud gaming. That is one justification for Microsoft’s proposed acquisition of Activision.

As previously mentioned how UK was quite reluctant about the approval due to the growth and development of the cloud gaming market, EU regulators believe that if Microsoft made those activator games exclusive to its platforms such as the distribution of PC and console games through cloud gaming services, then it will cause some tension in the market. 

However, the European Commission claimed that Microsoft provided solutions to assuage worries about competition. Activision games can be streamed on any cloud gaming platform of the user’s choosing by customers who have purchased or will purchase them. If a customer buys Activision titles, Microsoft will also provide royalty-free licenses to cloud gaming companies to stream those games. The concept is that players do not always need to stream the game they purchased.

A senior official at the European Commission told reporters on Monday that the move will increase competition in the market and allow streaming platforms that didn’t have access to Activision games to now have them

The action, according to a senior official at the European Commission, will increase competition in the industry and enable streaming services that previously lacked access to Activision titles to do so now. Margrethe Vestager, the Eu’s competition official released a statement showing their interest in the cloud gaming sector and shared how it’s going to develop more in the coming years. 

In addition to that, it’s also mentioned how the EU is also providing a 10-year license free for existing and upcoming games. The reason behind the move is to not just solve the problem but also boost pro competitiveness which could be a positive thing.

Concerning the approval, Microsoft’s Smith expressed his gratitude by saying that Microsoft has been ordered by the European Commission to automatically license well-known Activision Blizzard games to rival cloud gaming services. This will be universally applicable and enable millions of gamers to enjoy these games on any device of their choice.

The CEO of Activision also shared how they are enthusiastic about the advantages and acquisition delivered to players in Europe and around the world, and how they want to significantly increase their investments and staff throughout the EU.

Despite seeing possible problems with the Microsoft-Activision merger, U.K. and EU regulators came to different conclusions, with Britain banning the acquisition and the European Commission approving it. Microsoft provided the same remedy to the  U.K. authorities as it did to the EU. Competition and Markets Authority deemed that it was insufficient.

The CMA of the United Kingdom appeared to criticize the EU’s choice to approve the accord.“Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next ten years,” stated Sarah Cardell, CEO of the CMA. 

They would substitute a market subject to continuing regulation of the games Microsoft sells, the platforms to which it sells them, and the terms of sale for one that is free, open, and competitive. The independent panel group of the CMA rejected Microsoft’s plans and stopped this merger in part because of this. Cardell stated that although the CMA accepts the EU ruling, the U.K. regulator “stands by its decision.”Microsoft intends to challenge the CMA’s ruling.

The work of persuading competitors like Sony and other regulators, such as the U.S. Federal Trade Commission, that the acquisition of Activision won’t affect competition remains difficult for Microsoft despite the EU’s permission.

Proofread & Published By Naveenika Chauhan