EU Kicks Off Major Probe Into Microsoft's Activision Blizzard Deal

The biggest merger in gaming history will be undergoing serious scrutiny in one of its largest markets. The European Commission just formally announced a major "in-depth" investigation into Microsoft's ongoing acquisition of Activision Blizzard. 

A deal in which the world's largest software maker would acquire one of the largest game producers was always going to draw attention. As far back as the deal's announcement in January 2022, gamers have expressed concerns about cross-compatibility, and stakeholders have sought reassurance about what changes were — and were not – being planned in the wake of the acquisition. 

The EU isn't even the first major government agency to take notice of the deal's potential significance: the FTC in the U.S. has been investigating the deal for some time and does not expect to make a decision until June 2023. The EU has specific concerns, however, and they're worth addressing. The primary question at hand seems to be whether the Microsoft-Activision merger might unacceptably reduce market competition in game publishing.

The European Commission will explore a number of concerns

The EU brief lays out several areas of concern, all valid, though some do seem a little late. For instance, EU watchdogs would like to investigate whether Microsoft holds an effective monopoly over PC operating systems, a question that was answered ("yes, but customers seem content to live with it") before the EU existed. It's likely that forms the core of EU investigators' concern: could the new merger deliver the same de facto domination on consoles and mobile gaming that Microsoft currently enjoys on PC?

It's a fair question. Microsoft Gaming CEO Phil Spencer has rejected the possibility of single-platform dominance, pitching a more open marketplace with greater investment in mobile gaming (via WSJ Tech Live). Spencer has also sought to calm fears related to possible future exclusivity of popular titles, notably "Call of Duty," which the EU investigation calls out by name. Per Spencer, CoD will be available on Playstation "as long as there's a PlayStation out there to ship to," a quote likely aimed as much at EU investigators as nervous gamers.

With all due respect to Spencer, however, talk is cheap. Over the next few months, both EU watchdogs and the FTC will be digging into Microsoft's actual plans for Activision Blizzard and its enormous library of AAA titles. The EU has until March 23, 2023, to make its decision. The FTC will make a similar decision in June 2023. Both will significantly shape the gaming marketplace in the coming years.