EU Regulator Following Remedies by Microsoft Extends Deadline to Rule on Activision Deal - News
by William D'Angelo , posted on 17 March 2023 / 6,177 Views
The European Union regulator, the European Commission, in a new filing announced it has extended its deadline to make its final decision on Microsoft's Activision Blizzard acquisition.
The deadline has been moved from April 25 to May 22 after Microsoft has submitted its remedies in order to try to get the deal approved.
The filing didn't reveal what remedies Microsoft had offered the European Commission, however, Microsoft has recently announced it has signed multiple 10-year deals to bring Xbox games on PC to three cloud streaming services - Nvidia's GeForce Now, Boosteroid, and Ubitus. Microsoft has also signed a 10-year deal with Nintendo to release Call of Duty on Nintendo consoles on day one with full content parity.
"We have stood behind our promise to bring Call of Duty to more gamers on more devices by entering into agreements to bring the game to the Nintendo console and cloud game streaming services offered by Nvidia, Boosteroid, and Ubitus," a Microsoft spokesperson told Reuters.
"We are now backing up that promise with binding commitments to the European Commission, which will ensure that this deal benefits gamers into the future."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
More Articles
This is getting more exasperating all the time.
This keeps getting more incompetent & Farcical. All these smaller countries that already passed the deal had 0 problems reaching obvious and justified conclusions to pass the ABK deal, but these corrupt incompetent clowns keep asking for extensions.
AND YES, there is already enough reason to pass the deal, even is MS keeps adding in new partners, which is 6 layers of icing on a long finished ago cake. How about 12 more layers ? 30 more ?
Xbox already wants to be the Netflix of games but with even wider partners, so these deal were going to happen anyway.
Nah, he's right, this is getting ridiculous now. The Disney-Fox deal was bigger than this deal in every possible way (had a greater marketshare impact by boosting the combined Disney+Fox into the market leader position in the movie industry, affected more countries worldwide since movies are popular in more markets than video games are, etc.), and yet that acquisition closed in less than 9 months (late July 2018-mid March 2019) with only minimal concessions from Disney (they had to sell off a handful of cable tv channels such as History channel and A&E, and some Fox sports channels in Mexico and Brazil, that was it).
This Microsoft-ABK deal by comparison has been ongoing for 14 months so far, and it's looking like the earliest possible closing will make it 16-17 months, and it could drag on longer than that if FTC takes it to court even knowing that they likely won't win (consensus among legal experts is that Microsoft and Activision will likely win if it goes to court).
There is no chance that it goes to court in the US. Zero chance. The FTC knows it's a likely loss, and they cannot have that, especially not in the near future after the loss on the Facebook/Within acquisition.
The Disney Fox deal went through with Disney selling a lot of what Fox owned and split a load off too. They had no interest in sports got rid of all that. Fox Corporation was formed which is still run by Rupert Murdoch which does TV and Film projects and isn't Disney and they sold a lot of Fox controlled shares and stakes in other companies (like Sky TV for example).
Disney were very interested in getting certain things from Fox (their IPs, films, tv licences and film studios and Hulu). So that is what they got.
So far, all MS has seemingly done is deals, limited time deals at that, to bring 1 franchise to other platforms (to be fair Activision should have been doing already for some of them) and keep it on others for a certain time.
Now, I still think they will approve it but MS could do a dang sight more work to make it easier to go through, like selling a studio or 2 or even selling up certain IPs they don't want.
Well the main issue here that the regulators mainly only seem to care about one thing, as does Sony, and that is Call of Duty. Selling off some other Activision-Blizzard IP's or studios would be pointless here because the regulators pretty much only care about CoD. And Microsoft has said they would rather let the deal die and be out $2b than sell off CoD.
Some of the regulators additionally were worried that Xbox may have a cloud gaming monopoly if the deal went through, especially the EC here, but reports are now saying that the EC is happy with the 10 year deals that Xbox has now made with 3 other Cloud gaming companies, so it is likely they will approve the deal.
The main sticking point now is the UK's CMA. They have more power than most of the other regulators as their decisions are final and can't be overriden in court as I understand it. And they seem to only care about CoD and the possibility that Xbox may make it exclusive, even though Xbox is willing to sign a 10 year deal with Sony and willing to pay for a 3rd party watchdog to enforce that the 10 year deal is maintained for the full 10 years.
Is it? Both MS and Activision are publishers. I'd say it's rather a mix which is complicated. It's not like it's MS jut buying some new technology in the IT industry they just can't be bothered to make.
Agreed on the latter however, especially due to the fact the gaming industry is 30-40 years old, however it's still a limited time deal, meanwhile when Disney bought Fox, they only bought the stuff that mattered to them and other parts were let go. No limited or questionable anything, very obvious lines between this and that.
I just think if MS really only wanted certain parts they could do a lot more to help things get through. Disney did and were happy to let things go, MS seem to be trying to hold on to all of it. So not really fond of the comparisons when bought up.
It's predominantly a vertical merger as Microsoft is more a platform holder than a publisher. They publish a relatively small chunk of the software on Xbox, and they publish an even smaller percentage of software on Windows. Versus Disney/Fox that was predominantly a horizontal merger (though not entirely, due to Disney's ability to... for example... make theme park rides based on Fox properties).
Legal experts that have weighed in on it suggest they expect the courts would see it as a vertical merger, at any rate.
As for letting go of parts of ABK, what would they let go of? ABK publishes console, PC, and mobile titles. Microsoft is a console and PC platform holder, and has mobile ambitions.
I already said about the latter, studios and IPs they don't want. If it means the whole thing goes smoother, stop holding on to everything. Let some things go.
As for the latter, I can understand why they might think that way but considering the amount of studios MS now owns, this I find it odd if it's verticle only when it's not as simple as that. Out of the 3 major console makers, only MS make a game that directly competes with CoD (mp fps).
Yeah, that's true, they could do a comprehensive evaluation of ABK's decades of IP, and see if they'd be willing to part with any of them. Even agreeing to sell off some small portion of them might help get the deal done. It certainly wouldn't hurt at helping to close the deal. OK, good point, thanks for sharing it.
Speaking personally, I have very little interest in the Activision back catalogue. But somewhere along the way Activision picked up Accolade, and I have a great deal of interest in a lot of old Accolade IPs!
I guess the main reason to see the ABK deal as mostly vertical (or otherwise not horizontal) is that the overwhelming majority of ABK's revenue does NOT come from Microsoft's platforms. The amount of ABK revenue coming from Xbox and the Microsoft Store is tiny. The amount of revenue coming from PlayStation, Nintendo, Steam, Battle.net, and mobile is the vast majority of it.
A horizontal merger would be Microsoft significantly expanding its publishing into areas that it's already strong and increasing its market concentration, which this deal would do a little bit of. But it would far, far, far moreso expand it into markets it either isn't in or is an extremely small player in.
So, yeah, Microsoft is a publisher and is attempting to acquire a publisher, which sounds horizontal. But it doesn't result in a particularly significant increase in concentration in any one market. Not even in publishing on Xbox, I don't think. EA, Ubisoft, 2K, etc., are collectively all way too big and too numerous for this to be a significant concentration.
I see what you mean on the first point about 'vertical'. I wouldn't dismiss MS vs Nintendo revenue, considering CoD isn't on Nintendo. Much to the point of how Activision should have been tapping that market anyway. But I get you.
King we know is big and MS and next to no presence in that mobile gaming market so that should be something they should be investing in for sure, if it means King purchase is the way to go, then all to them. To be honest, in the case of mobile market, I think anything that gets money away from Apple, Google and Tencent the better.
What evidence do they have to show that they intended to make these deals before ?? Also what intentions do they have beyond the 10 yrs?
I recent report suggest Microsoft did not offer any remedies for the console market and that the EU will be exclusively focusing on remedies for the cloud gaming market.
We still do not have any word on the CMA but it appears Sony’s lobbying efforts failed in the EU, as if the above is true they will be getting no binding legal regulatory protections protecting their access to Call of Duty from the EU
That would be a big blow to sony tbh. Sigh
10 years is enough time for Sony or another company to have some kind of CoD competitor. Also, we do not know if CoD will still be nearly as popular in 10 years. With that said Sony's issue which should be obvious is the marketing deal. This is Sony's last year for the CoD marketing deal where they get to associate CoD with PS and have PS bundles, not to mention no Game Pass deal. After that deal is up Microsoft will have CoD marketing, console bundles, and will be able to put it on Game Pass. That is what Sony is afraid of. Lower console sales, software sales, and less PS+ subs is what they're afraid of because of 1 franchise will now belong to their primary competitor (outside Japan).
They will just keep releasing CoD on PS. When it comes to CoD, MS wants to expand it to as many platforms as possible, not restrict it. Essentially treating it like they have with Minecraft.
