Microsoft Completes $69 Billion Acquisition of Activision Blizzard

With iconic titles like "Call of Duty" in its portfolio, this acquisition positions Microsoft to compete more effectively with industry leader Sony.

Microsoft, the creator of Xbox, has successfully completed its acquisition of Activision Blizzard for a staggering $69 billion.

This landmark deal, first unveiled in January 2022, has now cleared all significant hurdles, including approval from the United Kingdom, marking a significant expansion of Microsoft’s presence in the highly competitive video gaming market.

With iconic titles like “Call of Duty” in its portfolio, this acquisition positions Microsoft to compete more effectively with industry leader Sony.

To address competition concerns, Microsoft agreed to sell streaming rights for Activision’s games, a move that paved the way for regulatory approval in Britain.

This achievement is a significant win for the tech giant as it strives to attract more users to its Xbox consoles and Game Pass subscription service.

Despite Sony’s PlayStation outselling Xbox, this acquisition presents an opportunity for Microsoft to bridge the revenue gap, especially as it seeks to make inroads into the $90+ billion mobile gaming market.

Activision’s popular mobile titles, including “Candy Crush Saga” and “Call of Duty Mobile,” instantly add over $3 billion in mobile gaming revenue to Microsoft’s coffers.

Microsoft Gaming CEO Phil Spencer, expressing his enthusiasm, stated, “Today is a good day to play.” He will oversee Activision’s operations, with the current CEO, Bobby Kotick, remaining in place until the end of 2023.

However, it’s worth noting that the deal still faces opposition from the U.S. Federal Trade Commission (FTC), which had previously attempted to block it.

The FTC is now focused on its appeal and will assess Microsoft’s agreement with Ubisoft Entertainment. Experts anticipate that any challenges from the FTC will likely lead to incremental concessions in the future.

The primary hurdle to the acquisition came from the Competition and Markets Authority (CMA) in Britain, which initially rejected the deal in April due to concerns about Microsoft gaining excessive control in the emerging cloud gaming market.

The CMA’s decision was the most significant test of its authority since Britain’s departure from the European Union.

However, Microsoft’s concession on streaming rights proved to be pivotal in swaying the CMA’s stance.

The CMA defended its decision, asserting that the new agreement prevents Microsoft from monopolizing the cloud gaming market, ensuring competitive prices and services for UK gamers.

Despite initial criticism, it maintained its position in the interest of competition, consumers, and economic growth.

While the CMA may view this as a victory, there is a cautious awareness of the need not to over-regulate the tech sector, given concerns that the UK may be perceived as unfriendly to business.

The European Commission had already approved Microsoft’s commitments to license Activision’s games to other platforms in May, further solidifying this colossal acquisition’s legal standing.