Microsoft just completed its groundbreaking $69 billion acquisition of video game giant Activision Blizzard, cementing a history and game-changing milestone in technology. The deal was finalized just seven hours after receiving final approval from the UK competition body, which had previously blocked the merger, removing the last major hurdle in this transition saga from there.
With the acquisition of the studio responsible for hit titles such as Call of Duty, Diablo and Overwatch, Microsoft is aiming to strengthen the position of its Xbox gaming console, which is currently the third-biggest seller to Sony , PlayStation and Nintendo just back from consolidation Also, Microsoft has the vision of adding Activision games to its multiplayer subscription service, similar to Netflix’s focus on gaming
This long journey to seal the deal reflects concerns from competitors and regulatory bodies. These concerns revolved around the potential for Microsoft’s expanding games portfolio to stifle competition, and especially in an industry marked by consolidation this raised concerns from independent game developers who feared being sidelined while moving products to well-established, successful franchises
However, this move is not without opposition, especially from the US. Federal Trade Commission (FTC). The FTC argues that a merger with Microsoft’s flagship game publisher could create a “walled garden” around its Xbox Game Pass subscription service and the growth of on-demand gaming After losing in court even after the fight to block the merger which is now the difficult task of the FTC antitrust promoters trying to turn this decision around
“The FTC continues to believe this agreement poses a threat to competition,” FTC spokeswoman Victoria Graham said.
Microsoft has consistently defended the acquisition, emphasizing its positive impact on the gaming industry. The company said the main goal is not to shut out rival console makers but to expand Activision’s games to a wider audience across platforms
In a statement, Phil Spencer, CEO of Microsoft’s Xbox division, reiterated this integration, saying, “Whether you play on Xbox, PlayStation, Nintendo, PC, or Mobile, you are – and will be – welcome.” here, even if Xbox is t where you.” including.” create their favorite franchise.”
To celebrate the reunion, Spencer performed the Broadway musical “Oklahoma!”
The UK Competition and Markets Authority gave approval last month when it first approved Microsoft’s revised proposal aimed at addressing concerns about competition and potential harm to players Notably is that the approval ensures that Microsoft’s cloud gaming market Monopoly isn’t, especially with the rise of cloud gaming platforms that allow users to stream games without buying an expensive console.
However, the approval shifts the balance of power heavily in favor of Microsoft, whose Xbox console trails Sony and Nintendo, said George Ziziashvili, senior senior analyst at Omdia, leading technology research consultants.
Microsoft gained approval from antitrust authorities in more than 40 countries when the deal was announced in January 2022. Importantly, it gained approval from the EU by agreeing to monitor its titles without paying royalties users and cloud gaming platforms over the decade
The strongest opposition to the deal comes from British and American regulators, with Sony expressing concerns about potential restrictions on PlayStation gamers’ access to Activision’s Call of Duty series
The FTC, despite a summer of court defeats in trying to stop the merger from undergoing further review, isn’t abandoning its efforts. He is appealing the decision and recently filed a notice of intent to appeal.
In exchange for UK approval, Microsoft agreed to sell the European cloud streaming rights to all existing and new Activision games to French games studio Ubisoft Entertainment over the next 15 years but with parliament speaking out opposed the way the contract was structured and warned other companies that previously they couldn’t work if they didn’t adopt Microsoft’s policy in considering requirements.
While the actions of the UK regulator in imposing regulatory provisions on Microsoft have been lauded, some critics say the regulator’s changing stance could be seen as indecisive
Until the acquisition, Dell held the record for the most expensive tech deal, buying data storage company EMC for about $60 billion in 2016. Last Microsoft deal: $26 billion for a professional web service LinkedIn.
Founded in 1979 by former Atari employees, Activision boasts a rich history of popular video games, including the Pitfall, Guitar Hero and World of Warcraft franchise One of its main assets for Microsoft is King Studios, which produces the Candy Crush known for its mobile games like Saga.
Bobby Kotick, CEO of Activision since 1991, announced his departure and promised to support the transition by the end of 2023. He will be CEO of a newly created Microsoft company until the transition is complete
“Collaboration with Microsoft will bring new features and new opportunities to our exceptional teams around the world,” Kotick said.
He now reports to Phil Spencer who has led Microsoft’s Xbox division since 2014.
With Sony PlayStation leading the industry, Microsoft has been actively acquiring game studios in recent years to lure more gamers to Xbox. In 2021, Microsoft spent $7.5 billion in cash to acquire ZeniMax Media, the parent company of Bethesda Softworks, a publisher of games known for titles like Elder Scrolls, Fallout and Starfield It bought for billions of dollars.
Rival companies are also trying to expand their game collections through acquisitions, and Sony has acquired independent game publisher Bungie Inc. near the Microsoft headquarters.
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