Microsoft’s acquisition of Activision Blizzard nears completion: A watershed moment for the gaming industry
Microsoft’s monumental $69 billion deal to acquire Activision Blizzard, a major player in the gaming industry, has overcome its final regulatory hurdle. After nearly two years of twists, turns, and legal battles, the UK’s Competition and Markets Authority (CMA) provisionally approved the acquisition. This mega-merger, the largest in the gaming industry to date, promises to reshape the landscape of interactive entertainment.
The CMA’s initial concerns centered on the potential for Microsoft to establish a monopoly in the cloud gaming sector by acquiring beloved franchises like Call of Duty, Overwatch, and Diablo. Microsoft hinted at a potential workaround by withdrawing Activision games from the UK market, sparking concerns among gamers. Simultaneously, the Federal Trade Commission (FTC) in the United States raised antitrust concerns and sought to block the deal.
In a dramatic courtroom showdown, gaming industry executives from Xbox, PlayStation, Bethesda, and other major companies provided unprecedented insights into the normally secretive industry. Ultimately, the U.S. court sided with Microsoft, allowing the deal to proceed.
To address the CMA’s concerns, Microsoft agreed to sell cloud gaming rights for Activision Blizzard’s games to Ubisoft. This agreement means that Ubisoft will have the final say on these rights for the next 15 years in the UK, ensuring that Microsoft does not gain exclusive control. While this carve-out applies exclusively to the UK, Microsoft must also provide an enforcement mechanism for the CMA to verify its compliance with the agreement.
The provisional approval comes shortly after a meeting between UK Treasury Head Jeremy Hunt and gaming industry leaders in California, where Activision Blizzard CEO Bobby Kotick was present. Kotick had previously warned that the UK’s failure to approve the deal would have dire consequences for the country’s gaming industry. Notably, his estimated windfall of $390 million from the acquisition far exceeds the $18 million settlement that Activision Blizzard agreed to pay following an investigation into sexual harassment and discrimination at the company.
As the final approval decision looms, this acquisition represents a pivotal moment for the gaming industry. It underscores the importance of regulatory oversight and the balance between corporate consolidation and maintaining a competitive landscape. Microsoft’s acquisition of Activision Blizzard is poised to have far-reaching implications for the future of gaming, with the potential to reshape how players access and enjoy their favorite titles.