After months of regulatory scrutiny, Microsoft has finally closed its massive $69 billion deal to acquire video game giant Activision Blizzard. The deal, which was first announced in January 2022, gives Microsoft ownership of some of the biggest franchises in gaming, including Call of Duty, World of Warcraft, and Overwatch.
The Activision Blizzard acquisition faced pushback from regulators around the world who were concerned about Microsoft gaining too much market power. The UK’s Competition and Markets Authority initially moved to block the deal over concerns that Microsoft would dominate the nascent cloud gaming market. However, last month, the regulator changed course after Microsoft agreed to sell Activision’s cloud gaming rights outside of Europe to French company Ubisoft.
With the UK’s approval, the last major hurdle was cleared, allowing Microsoft to finalize the acquisition. Microsoft said in a statement that it was “grateful for the CMA’s thorough review,” while Activision Blizzard CEO Bobby Kotick said the deal would “benefit our employees, players, shareholders, and partners.”
The deal comes as the gaming industry has exploded in size and profitability over the last 15 years, morphing from a console-focused business into a multi-platform powerhouse spanning mobile, PC, and the cloud. Microsoft has been trying to catch up to competitors like Sony, Tencent, and Nintendo, who have blockbuster franchises under their belts, such as God of War, The Last of Us, and League of Legends, just to name a few.
The Activision deal provides a shortcut for Microsoft to bulk up its content portfolio immediately, including such blockbuster titles as Diablo, Call of Duty, and Warcraft. It also gives the tech giant access to mobile gaming through Activision’s King Digital division, home of Candy Crush. According to Microsoft, Activision’s content library will help drive engagement and revenues for Xbox Game Pass, its Netflix-style subscription service.
With Activision Blizzard now a part of the tech giant, Microsoft will still have to grapple with toxic workplace issues that have plagued the company and only recently come to light. Last year, the company was sued by California regulators over allegations of sexual harassment, discrimination, and retaliation against female employees. Microsoft has vowed to clean up the company’s culture and invest more in compliance and safety.
While the deal is now officially completed, Microsoft did make concessions in Europe to ease antitrust concerns. It remains to be seen how regulators, especially in the U.S., will monitor the combined company going forward. But for now, the tech giant has achieved its goal of acquiring one of the world’s most prominent video game makers.
