Microsoft closes deal to buy Call of Duty maker Activision Blizzard after antitrust fights

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Microsoft has successfully concluded its acquisition of video game giant Activision Blizzard for a staggering $69 billion. This monumental tech deal, one of the most expensive in history, is poised to have profound implications for the video game industry as a whole.

The announcement of the deal’s completion came after Microsoft received final approval from the competition watchdog in Britain, marking a significant reversal of its earlier decision to block the merger. With this regulatory hurdle cleared, Microsoft can now proceed with its ambitious plans.

Taking control of studios responsible for iconic games such as Call of Duty, Diablo, and Overwatch represents a strategic move to bolster Microsoft’s Xbox gaming console. Currently positioned as the third-best-selling console behind Sony’s PlayStation and Nintendo, Microsoft aims to leverage its acquisition by integrating Activision titles into its multi-game subscription service, akin to a gaming-oriented Netflix.

The nearly 22-month duration it took to finalize this acquisition reflects the concerns expressed by competitors and government regulators. They feared that Microsoft’s expanding portfolio of games might be used to stifle competition. This acquisition is part of a broader trend of industry consolidation, causing some independent game developers to worry about being marginalized as the industry increasingly allocates resources to well-established blockbuster franchises.

While the deal has cleared hurdles in many countries, it still faces opposition from the U.S. Federal Trade Commission (FTC). The FTC argues that Microsoft’s consolidation of a major game publisher could create “walled gardens” around its Xbox Game Pass subscription service and the emerging business of on-demand game streaming. The FTC will now face the challenging task of attempting to unravel this acquisition after losing a court battle to halt it.

Despite these concerns, Microsoft has consistently defended the acquisition, emphasizing its intention to expand the reach of Activision games across various platforms rather than monopolizing them for its own console. Phil Spencer, CEO of Microsoft’s Xbox division, reiterated the company’s commitment to inclusivity, stating that players on Xbox, PlayStation, Nintendo, PC, or mobile platforms would remain welcome.

The approval from the U.K.’s Competition and Markets Authority was expected, especially after preliminary approval was granted last month. The revamped proposal from Microsoft aimed to address concerns about competition and its impact on gamers, particularly in the burgeoning cloud gaming market, where players can stream games to mobile devices and tablets without the need for expensive consoles.

While the approval opens new doors for Microsoft, it also tips the balance of power in its favor. George Jijiashvili, a senior principal analyst at tech research and advisory firm Omdia, believes that Microsoft now has a substantial opportunity to shape the future of the gaming industry.

This acquisition journey, initiated in January 2022, faced the most resistance from British and American regulators, with Sony also expressing concerns about limiting PlayStation gamers’ access to Call of Duty.

To secure U.K. approval, Microsoft agreed to sell European cloud streaming rights for all existing and upcoming Activision games for the next 15 years to French game studio Ubisoft Entertainment. However, the regulator criticized the process and warned against other companies attempting to adopt Microsoft’s tactics.

In conclusion, Microsoft’s acquisition of Activision Blizzard represents a monumental shift in the gaming industry’s landscape. It has navigated complex regulatory challenges and is poised to redefine the future of gaming, with implications that will resonate throughout the industry for years to come.

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More about Gaming Industry Acquisition

• Microsoft’s $69B Acquisition of Activision Blizzard
• Competition Watchdog’s Reversal in the UK
• Impact on Microsoft’s Xbox
• Concerns Raised About the Acquisition
• Microsoft’s Response to Concerns
• Impact on the Gaming Industry
• Effect on Competitors Like Sony
• Concessions Made by Microsoft
• Regulatory Process and Gaming Industry Dynamics