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Microsoft's Activision Blizzard Merger Approved In Europe (But It's Still Not A Sure Thing)

Just a few months ago, it was looking like Microsoft's merger with Activision Blizzard was totally doomed. The gaming giants caused quite a stir last year when Microsoft announced its intention to purchase the company behind juggernaut hits like "Call of Duty" and "World of Warcraft," igniting fears that Microsoft would create an unfair monopoly in the market. The Federal Trade Commission sued to stop the merger from being completed, pointing to the company's recent Bethesda exclusives as cause for concern. An ensuing investigation by the Competition and Markets Authority (CMA) eventually ruled against allowing the deal to proceed in the UK. Though Microsoft said it would appeal the CMA's decision, it certainly seemed as though the deal was dead in the water. However, negotiations with the European Commission may have set a precedent for the merger to go through after all.

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The biggest factor in the European Commission's original denial of the deal was its potential negative impact on the cloud gaming market, which is still relatively in its infancy. Following further discussions with the E.C., Microsoft has promised that Activision Blizzard titles will still be playable on cloud gaming services and devices not manufactured by the tech giant, allaying many of the regulatory body's anti-competition concerns. As a result, the European Commission has announced, "[Microsoft's] commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud game streaming compared to the current situation."

However, it should be noted that this latest approval does not mean the merger between Microsoft and Activision Blizzard will definitely go through.

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The big merger between Microsoft and Activision Blizzard still faces some hurdles

Despite this win in the European Union, the Voltron-eque combination of these companies is still far from a sure thing. Sony continues to contest the deal in the public arena, warning that Microsoft might try to purposefully sabotage "Call of Duty" and other Activision franchises just to make its acquired IP look better on Xbox. If this deal is ever to go through, Microsoft also still has to convince regulators in Britain and the United States that it's not out to create unfair imbalances in the gaming market.

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That may be easier said than done. In a statement from the CMA (per GamesIndustry.biz), the regulator argues, "Microsoft's proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next ten years. They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale." 

Microsoft fans will have to wait and see what the future holds, but from all appearances, the company appears determined to continue pushing the merger forward. In an open letter addressed to employees from December 2022, Activision Blizzard CEO Bobby Kotick held onto the belief that the deal would eventually be finalized. For the foreseeable future, the year-and-a-half-long battle to complete this acquisition will continue.

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