Largest Acquisition in the Games Industry Finally Approved

This article was last updated on October 13, 2023

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Introduction

American tech giant Microsoft has received approval from the British market watchdog, the CMA, for its acquisition of game producer Activision Blizzard for a staggering $69 billion. This approval marks the final hurdle in the acquisition process, as the deal had already been approved in the United States and the European Union. The acquisition is considered to be the largest in the history of the games industry.

Activision Blizzard is widely known for publishing popular titles such as World of Warcraft, Call of Duty, and Candy Crush. The potential takeover was initially announced in early 2021, and in recent months, rival Sony, the owner of Playstation, has voiced strong opposition to Microsoft’s plans. This is because Sony is concerned that Microsoft will make Activision Blizzard’s games exclusive to the Xbox, leaving Playstation owners without access to these popular titles. Microsoft has made assurances that it will not release Call of Duty exclusively for its own platform for the next ten years, in an attempt to alleviate these concerns.

Fear of Exclusivity

Sony’s fears of exclusivity were shared by the market watchdogs in the US, EU, and UK, who were concerned about Microsoft’s competitive position within the games industry. The British watchdog specifically raised questions about the potential cloud gaming market share that Microsoft would have in the UK after the acquisition. Cloud gaming, which allows users to stream and play games from the cloud without the need for a powerful PC or gaming console, is expected to experience significant growth in the coming years.

Microsoft is already a dominant player in the cloud gaming market, and there were concerns that the acquisition of Activision Blizzard could further consolidate its hold on this rapidly developing sector. To address these concerns, Microsoft has decided to sell the streaming rights of Activision games to the French publisher Ubisoft for the next fifteen years.

Last Hurdle Taken

“We have prevented Microsoft from having a stranglehold on this rapidly developing market,” stated the CEO of the British watchdog. Microsoft CEO Brad Smith expressed his satisfaction with the decision, noting that the company has now cleared the final hurdle to complete the acquisition. As a result, the deal will be finalized before the previously agreed deadline, thereby allowing Microsoft to avoid paying a $4.5 billion fine.

While the European watchdog had previously agreed to the acquisition, the US Federal Trade Commission (FTC) is still in disagreement. However, a federal judge has ruled in favor of Microsoft, and the FTC is currently appealing against this decision.

With the approval from the CMA, Microsoft is now on track to complete the acquisition of Activision Blizzard, further solidifying its position within the games industry. This landmark deal is expected to have far-reaching implications for both companies and the gaming community as a whole.

Summary

Microsoft has received approval from the British market watchdog, the CMA, for its acquisition of Activision Blizzard for $69 billion. This is the largest acquisition in the history of the games industry. Sony had voiced concerns about potential exclusivity, but Microsoft has made assurances to address these concerns. The acquisition had already been approved in the US and EU, and the final hurdle has now been cleared with the CMA’s approval. Microsoft plans to complete the acquisition before the previously agreed deadline, avoiding a hefty fine. The US FTC is still in disagreement with the acquisition and is currently appealing a federal judge’s decision. This acquisition will have significant implications for both companies and the gaming community.