Gaming’s Biggest Ever Deal: The Acquisition of Activision
16/10/2023Microsoft closed its purchase of Activision Blizzard on Friday, October 13 for a staggering $69bn: the biggest ever deal in the gaming industry.
The acquisition was initially announced in January 2022 but was met with strong resistance from regulators in the UK, EU and US.
In December, the Federal Trade Commission (FTC) sought to block the deal as it alleged Microsoft would harm competition in gaming consoles and subscription services by denying access of popular content it’s rivals.
On April 26 of this year, the Competition & Markets Authority (CMA) published a report following an investigation into the deal. The CMA took the decision to block the deal on the basis that it would be “the only effective and proportionate remedy to the substantial lessening of competition” in the supply of cloud gaming services.
Later, on May 15, 2023, the EU Competition Commission (EUCC) arguably paved the way for Microsoft’s eventual purchase of Activision, when it cleared the acquisition, subject to conditions relating to the cloud gaming space.
Microsoft eventually made a new submission in July, submitting that there had major developments since the CMA’s initial report, which amounted to a material change of circumstances, and therefore the CMA should prohibit the deal.
The result saw Microsoft entering into an agreement with Ubisoft, granting them perpetual cloud streaming rights for all current Activision Blizzard games as well as those released over the next 15 years.
Activision CEO, Bobby Kotick, shared with employees that he will stay on as CEO through the end of 2023, reporting in to Phil Spencer, head of Xbox.
Microsoft have received fair criticism over recent years that their subscription service lacked content, but with games like Call of Duty, Diablo and Overwatch now under Microsoft’s banner, we expect to see many of these titles being added to Game Pass over the coming months.
It’s worth noting that this deal doesn’t just impact console and PC gamers though, as Activision Blizzard King bring with them a roster of mobile games, including Candy Crush Saga. King generated $1.4bn in mobile revenue in 2022, making this deal a huge step for Microsoft’s ambition of breaking into the mobile gaming market.
The FTC haven’t quite given up just yet though as they continue to pursue their administrative complaint against the deal. They allege that Microsoft would be able to suppress competitors via their gaming consoles, subscription service and cloud-gaming business. The evidentiary hearing will take place pursuant to the district court’s decision in FTC v. Microsoft.
