Microsoft’s Activision Blizzard deal gets the green light in China

Last year, Microsoft spilled the beans about its plan to acquire US-based Activision Blizzard.

Microsoft’s Activision Blizzard deal gets the green light in China
Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard logo in this illustration taken January 18, 2022. Reuters/Dado Ruvic/Illustration/File Photo

The backstory: Last year, Microsoft spilled the beans about its plan to acquire US-based Activision Blizzard. You know, the company behind games like World of Warcraft, Call of Duty and even the addictive Candy Crush? This news has got everyone buzzing because it would be the biggest tech deal ever. The giant is offering a massive US$69 billion for it.

But the truth is that before this acquisition can go through, Microsoft has to jump through some hoops. The thing is, since Microsoft makes the Xbox and is a major game publisher, and Blizzard is another game publishing titan, there are some worries the deal would violate different antitrust laws and be a bit monopolistic.

Specifically, the US and UK have been throwing some shade over this deal. You see, the US Federal Trade Commission actually sued to block it last year and they're heading to court in August to settle things. On the other side of the pond, the UK is also looking into the acquisition because they’re worried about competition issues. But the EU took a different stance this month and gave its thumbs up after Microsoft made certain commitments that addressed those competition worries.

More recently: Meanwhile, in China, Activision Blizzard itself had a bit of a roller coaster ride this year. For video games to be released in the country, companies need a license from the government and a domestic distributor. And guess what? One of China's big-time game distributors, NetEase, had a sweet deal with Blizzard, distributing its games all over China and even managing the online servers. So it was a win-win situation.

But things went south when they couldn't agree on renewing their partnership for some of Blizzard's biggest franchises, like Diablo, World of Warcraft and Overwatch. So, in January, it shut its servers down in China, leaving players there completely stunned.

The development: Microsoft just scored a huge win in China. The tech giant got the green light from China's State Administration for Market Regulation (SAMR) to buy Activision Blizzard. SAMR is just the latest regulator of many, like some in the EU, Japan and Brazil, that said "go for it" to Microsoft's acquisition of Blizzard. But here's the thing. Even if China and Microsoft are good to go on this purchase, it's not a simple matter of bringing back those suspended Blizzard games in the country. Nope, Microsoft will still need to get a local publisher and a license from the National Press and Publication Administration (NPPA) to make it happen.

Key comments:

"China's unconditional clearance of our acquisition of Activision Blizzard follows clearance decisions from jurisdictions such as the European Union and Japan, bringing the total to 37 countries representing more than two billion people," said a Microsoft spokesperson in a statement last week. "The acquisition combined with our recent commitments to the European Commission will empower consumers worldwide to play more games on more devices."

"The commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation," said the European Commission in a statement in May.

"Microsoft's proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years," said the UK’s Competition and Market’s Authority (CMA) chief executive Sarah Cardell in May. "This is one of the reasons the CMA's independent panel group rejected Microsoft's proposals and prevented this deal."