After Meta’s Giphy acquisition, the European Commission announced on Tuesday that it has opened an “in-depth investigation” into Microsoft’s proposed acquisition of Activision Blizzard for $68.7B.
The Commission has concerns that the proposed acquisition may reduce competition in the markets for the distribution of console and personal computers (‘PCs’) video games and PC operating systems.
The Commission has set a deadline of 90 working days, until 23 March 2023, to make a decision.
The investigation
The Commission’s preliminary investigation suggests that Microsoft has the ability to foreclose rivals in the console video game market by preventing them from distributing Activision Blizzard’s games on their consoles.
EU regulators have also considered Microsoft’s potential to withhold access to multi-game subscription services and cloud game streaming services after acquiring Activision Blizzard.
“Such foreclosure strategies could reduce competition in the markets for the distribution of console and PC video games, leading to higher prices, lower quality, and less innovation for console game distributors, which may, in turn, be passed on to consumers,” says EU.
The Commission will now conduct an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed.
The acquisition
Activision Blizzard is a publicly listed company headquartered in Santa Monica, California, US. The US company is active as a developer and publisher of games for PCs, consoles, and mobile devices, and a distributor of games for PCs.
The investigation announcement comes months after Redmond giant Microsoft announced the acquisition of Activision Blizzard in January earlier this year.
With this acquisition, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony.
The planned acquisition includes iconic franchises from Activision Blizzard, and King studios like Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush, in addition to global eSports activities through Major League Gaming.
Besides revenue, the acquisition will bolster Microsoft’s Game Pass portfolio as the company plans to launch Activision Blizzard games into Game Pass, reaching a new milestone of over 25 million subscribers.
With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the industry’s most compelling and diverse lineups of gaming content.
Upon close, Microsoft will have 30 internal game development studios and additional publishing and esports production capabilities.
