9 November | Trades | Regulation

EU launches an in-depth investigation into the deal between Microsoft and Activision

Microsoft’s offer to buy Activision Blizzard, one of the largest video game producers, is under a thorough investigation of the European Union (EU) regarding the potential harm that it might cause to competition in the gaming industry. The proposed deal price is almost $69 million.

According to the EU press release, a preliminary analysis of the offer revealed a risk that Microsoft might forbid other distributors to purchase games, thereby significantly limiting competition. Activision's acquisition by Microsoft will make it the third-largest video game producer in the world with the rights to such popular franchises as Call of Duty and World of Warcraft.

As a result, the competition in the console and PC video game market may be disrupted, and that will gradually cause the rise in prices and fall in quality. In addition, an established monopoly might influence the innovative developments in the gaming industry and lead to a decrease in consumer demand.

The EU’s concerns are also related to the fact that the Microsoft и Activision merger is likely to consolidate the first company’s power in the Windows operating system. In this case, there is a possibility of Microsoft’s attempt to make its PC games exclusive for Windows.

Besides that, Microsoft will get the opportunity to place its video games in the company’s own cloud service and stop rivals from getting access to Activision’s products.

All of the aforementioned concerns confirmed the EU’s need for an in-depth investigation into the potential deal between the companies, which could last up to March 2023. The UK announced the start of the investigation’s second phase back in September.

Microsoft's official representative, in turn, noted that although few companies, including Sony, have expressed their concerns on the proposed offer, work with the European Commission continues. Microsoft sets the goal to make games more accessible and considers the release of games on Xbox and PlayStation on the same day.

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