Microsoft’s nearly $69 billion acquisition of video game giant Activision Blizzard has officially cleared its final regulatory hurdle, paving the way for the largest buyout in gaming history to close imminently.
Keypoints
- The CMA previously blocked the deal in April over cloud gaming competition concerns, but approved the revised agreement after Microsoft agreed to sell Activision’s cloud gaming rights to Ubisoft.
- Ubisoft will now control cloud streaming rights for Activision’s PC and console games produced over the next 15 years outside of the EEA region. This appeased the CMA’s worries about Microsoft monopolizing cloud gaming.
- With the CMA’s blessing, Microsoft has now cleared all major regulatory hurdles including the FTC and EU. The deal is expected to close imminently with trading of Activision shares already halted.
- Once finalized, Microsoft will acquire control of major franchises like Call of Duty, World of Warcraft, and Candy Crush. Many titles are expected to be added to Xbox’s Game Pass service.
- However, the FTC is still continuing legal action to block the deal despite losing its court case over the summer. The regulatory battle may not be over yet.
- Industry analysts view Microsoft’s acquisition as a smart long-term investment in interactive entertainment through Activision’s development capabilities and valuable IP.
- Competitors like Sony have secured commitments to keep Activision titles like Call of Duty on PlayStation for now, but Microsoft’s gaming empire expands tremendously.
The U.K.’s Competition and Markets Authority (CMA) approved the deal on Friday after previously blocking it over concerns about competition in the nascent cloud gaming market. To ease the CMA’s worries, Microsoft agreed to sell Activision’s cloud gaming rights to French publisher Ubisoft for the next 15 years outside of Europe.
This concession appears to have satisfied regulators in the U.K., the last remaining roadblock for Redmond-based Microsoft’s takeover bid. With the CMA’s blessing, Microsoft has navigated a lengthy regulatory gauntlet that also included the Federal Trade Commission (FTC) and the European Commission.
“We’re grateful for the CMA’s thorough review and decision today,” said Brad Smith, Microsoft’s Vice Chair and President. “We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.”
We’re grateful for the CMA’s thorough review and decision today. We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.
— Brad Smith (@BradSmi) October 13, 2023
Once the deal officially closes, Microsoft will absorb Activision Blizzard’s stable of iconic franchises such as Call of Duty, World of Warcraft, and Candy Crush. Many titles are expected to be added to Microsoft’s popular Xbox Game Pass subscription service. However, Activision’s upcoming Call of Duty and Diablo sequels will not appear on Game Pass until at least 2023 based on agreements with Sony.
The FTC Still Fighting Against Deal
Despite losing its high-profile lawsuit to block the deal over the summer, the FTC has vowed to continue fighting the acquisition. The regulator argues that Microsoft’s ownership of Activision franchises will stifle competition and consumer choice.
While the FTC’s challenge appears Quixotic after approvals from European and U.K. regulators, Microsoft’s Activision Blizzard takeover may face months of additional legal wrangling in the U.S. before final resolution.
Industry analysts largely view Microsoft’s purchase as a shrewd investment in interactive entertainment and an opportunity to boost Xbox’s catalog of exclusive games. However, critics argue the deal hands Microsoft too much influence over the game industry.
Rival Sony negotiated for Call of Duty’s continued availability on PlayStation consoles once the Activision deal closes. But otherwise, Microsoft will boast commanding leverage with so many gaming mega-franchises under its control.
Despite lingering regulatory uncertainty in the U.S., Microsoft seems poised to push forward with integrating Activision Blizzard, a process that will likely take at least a year by most estimates. When the dust finally settles, the deal seems certain to reshape Microsoft’s gaming division and the broader video game landscape for years to come.
