Microsoft Secures Final Approval for $69 Billion Acquisition of Activision Blizzard

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Microsoft received the ultimate green light for its $69 billion acquisition of Activision Blizzard from the United Kingdom’s Competition and Markets Authority (CMA) on Friday. This reverses the regulator’s prior stance to obstruct the transaction, thereby eliminating the last impediment to one of the most substantial technological acquisitions in history.

The acquisition of Activision Blizzard—known for other hit titles such as Candy Crush, World of Warcraft, Diablo, and Overwatch—by the maker of Xbox is anticipated to finalize ahead of a forthcoming Wednesday deadline. This culminates a nearly two-year process that had been hampered by rigorous regulatory examination from global authorities.

Last month’s preliminary nod from the CMA had paved the way for its final approval. The revised proposal from Microsoft was designed to mitigate apprehensions that the acquisition would be detrimental to competition and have an adverse impact on gamers, particularly in the burgeoning sector of cloud gaming. In this sector, gamers can bypass the need for high-cost gaming consoles and stream games directly to their mobile devices or tablets.

The UK regulator stated that the amended agreement would prevent Microsoft from monopolizing the cloud gaming market, thus sustaining competitive pricing and service options for UK consumers of cloud gaming services.

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Microsoft President Brad Smith expressed gratitude for the “comprehensive review and decision,” asserting that the acquisition will be beneficial for gamers and the global gaming industry. Activision CEO Bobby Kotick also voiced his approval, saying, “We are eager to become a part of the Xbox Team.”

Joshua Chapman, managing partner at venture capital firm Konvoy, which specializes in investing in video game startups, opined that the merger would be advantageous for gamers and stimulate healthy competition in the gaming industry.

Since its announcement in January 2022, Microsoft has successfully obtained authorization from antitrust bodies in over 40 countries, most notably from the 27-member European Union. The EU’s approval was contingent upon Microsoft’s commitment to permit users and cloud gaming platforms to stream its titles royalty-free for a decade.

Despite this, the transaction encountered opposition from regulatory bodies in the United States and the United Kingdom, alongside objections from leading competitor Sony, who were concerned about restricted access to the Call of Duty series for PlayStation users.

The U.S. Federal Trade Commission (FTC) is still in legal proceedings to reverse the merger, despite losing an initial court case aimed at delaying the transaction for further review.

To secure the CMA’s approval, Microsoft has agreed to divest cloud streaming rights outside the EU and three other European countries for all current and future Activision titles for the next 15 years to French game studio Ubisoft Entertainment.

Initial objections from British regulators were primarily driven by the risk that Microsoft would monopolize Activision’s titles in the cloud gaming market. However, after considering new developments—including the EU’s approval and an agreement with Sony to keep Call of Duty available on PlayStation for a minimum of 10 years—the CMA revised its position.

Yet, Sarah Cardell, CEO of the CMA, criticized Microsoft’s approach during the review process. Max von Thun, director of the Europe office of the Open Markets Institute, noted that the CMA’s change of stance could make it appear “weak and indecisive.”

As the acquisition moves forward, industry experts warn of the potential risk that merging firms may feel emboldened to dismiss initial regulatory disapprovals, which could have broader implications for antitrust enforcement.

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Contributed by AP Technology Writer Matt O’Brien from Providence, Rhode Island.

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More about Microsoft Activision Acquisition

• Microsoft’s Official Announcement of Activision Acquisition
• UK Competition and Markets Authority Press Release
• European Union’s Antitrust Approval
• U.S. Federal Trade Commission Statement on Microsoft-Activision
• Sony’s Concerns about the Acquisition
• Overview of Cloud Gaming
• Max von Thun’s Criticism of CMA’s Decision
• Activision Blizzard Corporate News