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HomeTech ShortsMicrosoft Completes Acquisition of Activision Blizzard After Antitrust Battles : Report

Microsoft Completes Acquisition of Activision Blizzard After Antitrust Battles : Report

Microsoft successfully acquired Activision Blizzard following regulatory approval, despite antitrust concerns. This acquisition expands Microsoft’s presence in the gaming industry, granting them ownership of popular franchises like Call of Duty and World of Warcraft. It bolsters their Xbox Game Studios and Game Pass offerings, making Microsoft a major player in the gaming world and potentially reshaping the future of gaming.

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Microsoft has successfully concluded its $69 billion acquisition of the renowned video game-maker, Activision Blizzard, following a series of antitrust challenges. This monumental deal is one of the largest tech acquisitions in history and has the potential to reshape the video game industry.

The acquisition received final approval from the United Kingdom’s competition watchdog, which reversed its previous decision to block the merger, eliminating the last hurdle for the transaction.
This acquisition grants Microsoft control over the studios responsible for blockbuster games such as Call of Duty, Diablo, and Overwatch, offering a significant boost to Microsoft’s Xbox gaming console, which currently ranks third in sales behind Sony’s PlayStation and Nintendo. Microsoft’s broader ambition includes integrating Activision titles into its multi-game subscription service, similar to a Netflix for video games.

The extended 22-month period to finalize the deal reflected concerns from competitors and government regulators who feared that Microsoft could leverage its growing game portfolio to stifle competition. This acquisition is part of a broader trend of industry consolidation, raising concerns among independent game developers who worry about potential sidelining as the industry directs its resources toward established blockbuster franchises.

Notably, the deal still faces opposition from the U.S. Federal Trade Commission (FTC), which argues that Microsoft’s consolidation of a major game publisher could lead to “walled gardens” around its Xbox Game Pass subscription service and the emerging market of on-demand game streaming. However, the FTC faces a challenging battle after losing a court fight to pause the merger.

Microsoft has consistently defended the deal, emphasizing its aim to expand the reach of Activision games across multiple platforms rather than limiting them to rival consoles. Microsoft’s Xbox division CEO, Phil Spencer, reassured gamers that regardless of the platform they choose, they will continue to enjoy these games.
The approval from the UK’s Competition and Markets Authority was expected, as it had provided preliminary approval earlier, following a revised proposal from Microsoft to address concerns about competition and the impact on gamers, particularly in the emerging cloud gaming market.

While the deal has faced significant opposition from British and American regulators, as well as concerns from Sony regarding Call of Duty access, Microsoft’s acquisition received approvals from antitrust authorities in more than 40 countries. Crucially, it secured the support of the European Union by allowing users and cloud gaming platforms to stream its titles without royalty payments for a decade.

Microsoft’s acquisition of Activision sets a new record in tech deals, surpassing Dell’s purchase of data-storage company EMC in 2016. The deal’s value was initially estimated at $68.7 billion, including Activision Blizzard’s net cash, but Microsoft agreed to pay approximately $75 billion, or $95 in cash for each share of the game-maker.
Activision Blizzard, founded in 1979, has played a significant role in creating and acquiring popular video games throughout the years, from Pitfall in the 1980s to Guitar Hero and the World of Warcraft franchise. Notably, its subsidiary, King studio, which created popular mobile games like Candy Crush Saga, was a key asset in this acquisition.

Bobby Kotick, who served as CEO since 1991, signaled his forthcoming departure, noting that he would remain as CEO until the end of 2023 and assist with the transition, as Activision Blizzard becomes a Microsoft subsidiary.

Microsoft, despite being in second place behind Sony’s PlayStation, has been strategically acquiring game studios to bolster the Xbox platform. Notable acquisitions include ZeniMax Media, the parent company of Bethesda Softworks, and Mojang, the developer of the immensely popular game, Minecraft.

In a competitive gaming landscape, rivals, including Sony, have also invested in game studios to enhance their game collections.