The regulator stated that Microsoft has a potential economic incentive to foreclose access to Activision Blizzard's console and PC video games such as ‘Call of Duty' which might prevent other distributors of console video games from distributing Activision Blizzard's console video games on consoles
EC to undertake a phase 2 investigation into Microsoft's acquisition of Activision Blizzard. (Credit: עמית עמית גירון/Wikimedia Commons)
The European Commission (EC) has launched an in-depth phase 2 investigation into the previously announced Microsoft’s $68.7bn acquisition of US-based video game holding company Activision Blizzard.
The concern of the regulator is that the proposed deal would lead to a significant reduction in competition within the markets for the distribution of gaming consoles and personal computer (PC) video games and for PC operating systems.
Microsoft announced the all-cash acquisition of Activision Blizzard in January 2022. According to the agreement, shareholders of the publicly-listed Activision Blizzard will receive $95 per share from Microsoft.
In its preliminary investigation, the EC concluded that the deal will impact competition for multi-game subscription services and/or cloud game streaming services.
The Commission believes that Microsoft has a potential economic incentive to foreclose access to Activision Blizzard’s console and PC video games such as ‘Call of Duty’. This is said to result in preventing other distributors of console video games from distributing Activision Blizzard’s console video games on consoles.
According to the EC, the proposed merger would lead to increased prices, lower quality, and less innovation for distributors of console games which could eventually affect the consumers.
EC Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “For years, Microsoft has been a major player across the gaming supply chain.
“It is acquiring Activision Blizzard, a highly successful producer of gaming content. We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as for rival suppliers of PC operating systems.
“The point is to ensure that the gaming ecosystem remains vibrant to the benefit of users in a sector that is evolving at a fast pace. Our in-depth investigation will assess how the deal affects the gaming supply chain.”
The Commission has set itself a deadline of 23 March 2023 to take a decision on the proposed acquisition.