Microsoft & Activision Blizzard Deal
Microsoft has successfully closed its $69 billion acquisition of gaming giant Activision Blizzard. The deal was initially announced in early 2022. It positions Microsoft as a major player in the video gaming industry. It makes its position to compete with industry leader Sony. The acquisition adds iconic titles like “Call of Duty” to Microsoft’s gaming portfolio. Thus, it significantly expands its reach in the console, mobile, PC, and cloud gaming sectors.
A Triumph Over Regulatory Hurdles
The acquisition faced significant regulatory scrutiny. It was particularly in the United Kingdom. It is where the Competition and Markets Authority (CMA) initially blocked the deal. The CMA raised concerns that the acquisition could give Microsoft undue control over the emerging cloud gaming market, potentially harming competition.
It’s a big day for us. Today, we join Team @Xbox. All of our history and success leading to this moment is because of you – our incredible gaming community. Thank you from the bottom of our hearts.https://t.co/OjQgIed2nN
— Activision Blizzard (@ATVI_AB) October 13, 2023
However, the situation took a turn when Microsoft agreed to sell the streaming rights for Activision’s games to Ubisoft Entertainment.
A Game-Changing Concession
The CMA highlighted Microsoft’s concession on streaming rights as a “game-changer” in the regulatory process. By ensuring that Microsoft would not lock out competition in the cloud gaming sector, the CMA aimed to maintain competitive prices and services for cloud gaming customers in the UK. The CMA’s resolute approach set it apart as the only competition agency globally to secure such an outcome.
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While the CMA’s approval paves the way for the acquisition in the UK, the deal faced opposition from the U.S. Federal Trade Commission (FTC). Despite the FTC’s objections, Microsoft proceeded with the acquisition, indicating that the deal will not be halted. On the European front, the European Commission greenlit the deal in May, accepting Microsoft’s commitments to license Activision’s games for other platforms.
CMA’s Determination and Independence
The CMA’s initial decision to block the acquisition was met with strong opposition from the merging parties, with Microsoft expressing frustration about the regulatory process. The CMA’s Chief Executive, Sarah Cardell, emphasized the regulator’s commitment to its decisions being free from political influence and unaffected by corporate lobbying. While Microsoft had the opportunity to restructure the deal during the initial investigation, it chose to persist with measures that the CMA deemed inadequate.
Microsoft’s Gratitude and Outlook
Microsoft expressed its gratitude for the CMA’s thorough review and decision, highlighting its commitment to the acquisition’s benefits for players and the global gaming industry. Microsoft Vice Chair and President Brad Smith conveyed their belief that this acquisition will be advantageous for the gaming community and the industry as a whole.
Activision Blizzard welcomed the official approval from the CMA, emphasizing the positive outlook for its future with Microsoft. They eagerly anticipate becoming part of the Xbox Team, aligning their vision with Microsoft’s strategic goals.
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Microsoft’s successful acquisition of Activision Blizzard is a transformative milestone in the gaming industry.
