Microsoft is reportedly planning to close its $68.7 billion acquisition of Activision Blizzard, the gaming giant behind popular franchises like Call of Duty, Overwatch, and World of Warcraft, next week. The deal, which was announced in January 2023, is one of the largest in the history of the gaming industry and would make Microsoft the owner of some of the most valuable intellectual properties in the world.
A long and complex regulatory process
The acquisition has faced a long and complex regulatory process across multiple jurisdictions, as authorities have scrutinized the potential impact of the deal on the competitive landscape of the gaming market. Microsoft has had to make several concessions and adjustments to address the concerns raised by regulators, especially regarding the future of cloud gaming.
Cloud gaming is a technology that allows players to stream games from remote servers without having to download or install them on their devices. It is seen as a key growth area for the gaming industry, as it lowers the barriers to entry and expands the potential audience for games. Microsoft has its own cloud gaming service, Xbox Cloud Gaming, which is part of its Xbox Game Pass subscription offering.
One of the main hurdles for Microsoft’s acquisition was the UK’s Competition and Markets Authority (CMA), which blocked the deal earlier this year over fears that it would harm competition and innovation in cloud gaming. The CMA argued that Microsoft could use its control over Activision Blizzard’s games to restrict access to rival cloud gaming platforms or raise prices for consumers.
Microsoft recently restructured the deal to transfer cloud gaming rights for current and new Activision Blizzard games to Ubisoft, the French publisher of titles like Assassin’s Creed and Far Cry. This move satisfied the CMA, which granted preliminary approval to the deal late last month. The CMA has a deadline that expires today on gathering opinions over whether it should grant final consent to Microsoft to proceed with the merger. A final decision from the CMA is expected next week, and barring any surprise last-minute changes should allow Microsoft to close its deal.
Other regulators have given their green light
The CMA was not the only regulator that posed challenges for Microsoft’s acquisition. The European Union also approved the deal with important cloud concessions from Microsoft, such as providing cloud gaming licenses to other companies, including rival NVIDIA’s GeForce NOW streaming service.
In the US, the Federal Trade Commission (FTC) sued to block the deal last year, alleging that it would harm competition and consumers in the gaming industry. The FTC also tried to secure a preliminary injunction to stop Microsoft from finalizing its acquisition, but failed to do so in a court hearing in July. The FTC is still appealing the outcome of that hearing and plans to resume its own administrative case against Microsoft’s proposed acquisition. However, these actions are unlikely to prevent Microsoft from closing its deal on time.
Other regulators, such as Japan and Brazil, have already given their approval to the deal, which means that Microsoft has cleared most of the regulatory hurdles it faced.
What does this mean for gamers?
Microsoft’s acquisition of Activision Blizzard is a game-changer for the gaming industry, as it would significantly expand Microsoft’s portfolio of games and studios. Microsoft already owns some of the most iconic gaming brands, such as Halo, Minecraft, and Bethesda’s Fallout and Elder Scrolls series. With Activision Blizzard under its umbrella, Microsoft would add more than 30 studios and over 400 million monthly active players to its network.
Microsoft has said that it plans to bring Activision Blizzard’s games to its Xbox Game Pass service, which offers access to hundreds of games for a monthly fee. This would make Xbox Game Pass even more attractive and valuable for gamers, as they would be able to play some of the most popular and anticipated games without having to buy them separately.
Microsoft has also pledged to support Activision Blizzard’s employees and communities, as well as address the issues of workplace culture and harassment that have plagued the company in recent years. Activision Blizzard has faced multiple lawsuits and investigations over allegations of discrimination, sexual misconduct, and toxic work environment at its studios. Microsoft has said that it will work with Activision Blizzard’s leadership team to ensure a safe and inclusive workplace for all employees.
Microsoft has also promised to respect the creative autonomy and vision of Activision Blizzard’s studios and franchises, and allow them to continue developing games for multiple platforms, including PlayStation and Nintendo Switch. However, some analysts have speculated that Microsoft could make some of Activision Blizzard’s future games exclusive or timed-exclusive for Xbox and PC platforms, as a way to boost its competitive edge over Sony and Nintendo.
