Microsoft Successfully Acquires Activision Blizzard: What It Means for the Gaming Industry

Highlights

• Microsoft completes $68.7 billion acquisition of Activision Blizzard after overcoming regulatory hurdles.
• UK’s CMA approves the deal after Microsoft agrees to exclude Activision’s cloud gaming rights.
• FTC lawsuit against the acquisition gets rejected by a U.S. district court, clearing the way for the merger.

After overcoming multiple hurdles and regulatory challenges, Microsoft has successfully completed its acquisition of video game behemoth Activision Blizzard.

The deal, valued at a staggering $68.7 billion, brings together two giants of the gaming industry under a single umbrella.

This acquisition has been the subject of much speculation and concern, primarily regarding its impact on market competition and game availability across different platforms.

Market Concerns and Regulations

Microsoft first announced its intention to acquire Activision Blizzard in January 2022, offering a 30 percent premium over the market value, making it hard for Activision to decline.

This raised alarm bells in the gaming community, with critics questioning the implications for game exclusivity, particularly for popular titles like Call of Duty.

The acquisition faced considerable resistance from regulatory bodies.
In the United States, the Federal Trade Commission (FTC) filed a lawsuit against Microsoft in December 2022, suggesting that the deal would give Microsoft an undue edge in the console gaming market.

Meanwhile, the Competition and Markets Authority (CMA) in the UK expressed similar reservations, citing potential monopoly issues in the cloud gaming sector.

Breakthrough in Legal Struggles and CMA Approval

A breakthrough came in July 2023 when a US district court rejected the FTC’s lawsuit to restrain the deal, giving Microsoft a breath of fresh air.
However, concerns from the UK’s CMA remained a major stumbling block.

In a strategic pivot, Microsoft offered to exclude Activision’s cloud gaming rights from the acquisition to appease the CMA while keeping the deal’s valuation unchanged at $68.7 billion.

This move led to the CMA giving its long-awaited nod to the merger.

Relief for PlayStation Users

Amid concerns that the acquisition would mean Activision titles becoming Xbox exclusives, an agreement was signed with Sony to keep all current and future versions of Activision games, including Call of Duty, on the PlayStation platform until December 31, 2027.

FAQs

What is the value of Microsoft’s acquisition of Activision Blizzard?

The acquisition is valued at $68.7 billion, making it one of the largest in the tech industry.

Who are the regulatory bodies involved?

The Federal Trade Commission (FTC) in the U.S. and the Competition and Markets Authority (CMA) in the UK were the main regulatory bodies scrutinizing the deal.

Is Activision Blizzard’s cloud gaming part of the deal?

No, Microsoft has excluded Activision’s cloud gaming rights to get approval from the CMA.

Will Activision games still be available on PlayStation?

Yes, an agreement with Sony ensures that Activision games will stay on the PlayStation platform until the end of 2027.

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