After 18 months of regulatory hurdles and negotiations, Microsoft closed the $69 billion acquisition of game developer and distributor Activision Blizzard on Friday. Since it was first proposed in January 2022, the deal was scrutinized by the Federal Trade Commission, European Commission and the UK’s Competition and Markets Authority. This summer, the FTC lost their bid to block the transaction, the EU approved it, and on Friday, the CMA finally granted consent.
Prior to this final order, the CMA rejected Microsoft’s acquisition bid in April and August 2023. A key factor in the CMA’s decision was Microsoft’s commitment to exclude Activision’s non-EEA cloud streaming rights and to divest them to Ubisoft. To ensure consent, the divestiture must be completed.
In the CMA’s formal “Decision on Consent Under the Final Order,” the regulatory agency explains why they finally gave the green light.
“The CMA has decided to give Microsoft Corporation (Microsoft) consent to acquire Activision Blizzard, Inc. (Activision) (the Parties) excluding Activision’s cloud streaming rights outside of the European Economic Area (EEA) (the Merger) subject to the condition that the sale of Activision’s cloud streaming rights completes prior to completion of the Merger. As set out below, this consent is required as a result of the CMA’s Final Order prohibiting Microsoft’s acquisition of the whole of Activision (the First Proposed Merger),” the decision said.
This is the largest consumer tech deal since AOL bought Time Warner for $182 billion in January 2000, according to The Hollywood Reporter.
Phil Spencer, CEO of Microsoft Gaming, shared the news on the official Microsoft blog.
“Today, Microsoft officially completed the acquisition of Activision Blizzard, publishers of some of the most played and most beloved franchises in gaming history across console, PC and mobile. From Pitfall to Call of Duty, World of Warcraft to Overwatch, Candy Crush Saga to Farm Heroes Super Saga, their studios have pushed the boundaries of gaming for players around the world,” Spencer said in an October 13 blog post.
“For the millions of fans who love Activision, Blizzard and King games, we want you to know that today is a good day to play. Together, we’ll learn, innovate and continue to deliver on our promise to bring the joy and community of gaming to more people,” added Spencer.
Not so fast
There is a case pending between the FTC and Microsoft in administrative court that could remain in limbo for years, reports The New York Times. If the FTC prevails in that case, it is possible that Microsoft may have to undo the deal, though they would have the right to appeal. With the FTC’s previous attempts to block the acquisition shut down, it seems unlikely that the FTC would prevail, but until the case is resolved or the FTC stands down, this isn’t quite over.
Insider Take
The final closing of the $69 billion deal, while great for Microsoft and Activision Blizzard, brings new questions for the gaming industry and big tech in global markets. If Microsoft can navigate and win in three major markets – international and national – with such a huge deal, perhaps other tech giants like Amazon, Apple, Google and Meta will learn how to play regulatory roulette. Did this deal really leave room for more competition in the video game market, or did it skew things in favor of Microsoft, despite their concessions?
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