Microsoft’s planned acquisition of Activision Blizzard for $68.7 billion has reportedly cleared a major regulatory hurdle, as the European Union (EU) is expected to approve the deal. According to Reuters, Microsoft’s licensing offers to competitors are expected to address the EU’s antitrust concerns about the deal, which the EU previously said could “significantly reduce competition” in the gaming industry.
While the EU is not expected to demand asset sales, Microsoft’s plan to keep hold of the Call of Duty franchise has been a point of contention. However, the company has pledged to keep the franchise available on competing platforms for at least a decade, and it has even committed to bringing the game to Nintendo’s consoles.
Microsoft has stated that it is “committed to offering effective and easily enforceable solutions that address the European Commission’s concerns.” A Microsoft spokesperson told Reuters, “Our commitment to grant long-term 100% equal access to Call of Duty to Sony, Steam, NVIDIA, and others preserves the deal’s benefits to gamers and developers and increases competition in the market”.
The acquisition was announced by Microsoft in January 2022, as the company seeks to compete with industry leaders Tencent and Sony, while also developing its take on the metaverse. Microsoft CEO Satya Nadella stated at the time that “gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”
Microsoft will still need to gain approval from the US Federal Trade Commission and UK regulators before the deal can be finalized. The company has until July to address any antitrust concerns, or it will need to renegotiate or abandon the purchase, which could result in a breakup fee of up to $3 billion.