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Microsoft's $69B deal to buy Activision Blizzard under investigation by EU regulators

Officials are concerned acquisition could reduce competition and lock gamers to Xbox and Microsoft PCs

The European Commission launched an antitrust investigation examining Microsoft's $69 billion acquisition of computer games maker Activision Blizzard on Tuesday.

Microsoft agreed to buy Activision in January, when the Californian games studio was in the middle of a PR crisis and its share price was falling. Lawsuits and internal spats over Activision's "frat boy" culture piled up, leading to numerous resignations and CEO Bobby Kotick cutting his annual salary to just $62,000.

Although Microsoft wants to get its hands on Activision's popular franchises like Call of Duty and World of Warcraft for its Xbox unit, the acquisition has yet to be approved. Market regulators in the US, UK, and now Europe are examining potential antitrust issues. The European Commission is concerned the deal could reduce competition amongst rival console makers like Sony's Playstation if Microsoft releases specific games exclusively for the Xbox or PCs running Windows. 

"We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as for rival suppliers of PC operating systems," said Margrethe Vestager, executive vice-president in charge of competition policy, in a statement.

"The point is to ensure that the gaming ecosystem remains vibrant to the benefit of users in a sector that is evolving at a fast pace. Our in-depth investigation will assess how the deal affects the gaming supply chain."

A spokesperson from Microsoft told The Register it plans to release top games like Call of Duty across multiple platforms.

"We're continuing to work with the European Commission on next steps and to address any valid marketplace concerns. Sony, as the industry leader, says it is worried about Call of Duty, but we've said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less," the representative told us. 

In a memo to Activision staff, Kotick said the acquisition has already been approved by authorities in Brazi, and he expects the deal to close in June 2023. Successfully merging with Microsoft would help the company grow and "fill the thousands of open positions we will have over the next few years."

"As we said when we announced our merger, this is a long process … We continue to work cooperatively with regulators in other jurisdictions, and the process is moving along as we expected. Because so many large global companies across the world are now competing in the nearly $200 billion dollar games industry, it's understandable that regulators are trying to better understand the games business.

"This week the European Commission announced that we have entered the second phase of our review in the region. We will continue to cooperate with the European Commission where, in the countries they represent, we have many employees. We have been working closely with Microsoft to actively engage regulators in other key countries to answer their questions and provide them with information to assist with their review," he concluded. ®

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