The purchase of Activision Blizzard by Microsoft has been anything but a process. It was first announced on January 18, 2022, with a price tag of $68.7 billion. However, the deal has faced complexities and regulatory scrutiny.
Despite facing challenges and even having a preliminary injunction denied, the FTC remained unwavering in its opposition. Across the pond, the Competition and Markets Authority (CMA) in the UK also had reservations about this acquisition.
Initially blocking the deal, the CMA later gave conditional approval after Microsoft agreed to a significant concession: the sale of Activision’s cloud gaming rights to Ubisoft.
This move was aimed at preserving competitive prices and better services in cloud gaming. With the legal and regulatory hurdles seemingly behind them, Microsoft is now poised to finalize the acquisition by October 13, 2023, just days before the deadline set by both companies.
Microsoft acquires Activision Blizzard after 21 months
The FTC’s opposition to Microsoft’s acquisition of Activision Blizzard has been nothing short of relentless. Despite suffering multiple legal defeats, the FTC continued to pursue its case against Microsoft. The Commission’s primary concern was the potential stifling of competition, particularly in the cloud gaming sector. The FTC even went as far as to appeal the verdict with the 9th Circuit U.S. Court of Appeals. Later, only to withdraw the complaint and reinstate it again.
The UK’s Competition and Markets Authority initially blocked the acquisition, citing similar competition concerns around cloud gaming. However, Microsoft managed to win the CMA’s approval by agreeing to sell Activision’s cloud gaming rights to Ubisoft. This concession was a strategic move that allowed Microsoft to gain the CMA’s approval while also addressing the regulatory body’s concerns about competition in cloud gaming. The CMA framed this as a victory for competitive prices and better services in the cloud gaming sector.
Phil Spencer, CEO of Microsoft Gaming, shared his thoughts on what it means for Activision Blizzard to join the Xbox family after the long acquisition process finally came to a close.
For more: https://t.co/e1GBkcJjR3 pic.twitter.com/IhoYn7ie9J
— IGN (@IGN) October 13, 2023
With the approval from the UK and the resolution of challenges by the FTC, Microsoft is on the verge of completing this historic acquisition. The FTC is holding off on proceeding with its internal trial until a decision is reached on its appeal of the trial verdict. Notably, both of these legal steps are expected to take place after Microsoft finalizes the acquisition.
Microsoft has already announced that they will include Activision Blizzard games in their Game Pass subscription service. They have also reached an agreement with Sony for Activision games such as Call of Duty. This purchase is predicted to make an impact on the gaming industry. Further, it is reshaping and establishing benchmarks for consolidations and takeovers. It also prompts inquiries about the availability of cloud gaming across platforms and how game content will be distributed in the times.