Table of Contents

Microsoft and Activision Blizzard: The Deal is Done!

Yes, after a long and arduous journey filled with regulatory hurdles and intense scrutiny, Microsoft’s acquisition of Activision Blizzard has officially been approved and finalized. The $69 billion deal, the largest in gaming history, closed on October 13, 2023, marking a significant shift in the landscape of the video game industry. This means Activision Blizzard is now a subsidiary of Microsoft, and the future of some of gaming’s biggest franchises is under new management. This article will delve into the intricacies of the deal and what it means for gamers and the industry.

The Rocky Road to Approval

The path to this acquisition was anything but smooth. Initially announced in January 2022, the deal immediately drew the attention of regulatory bodies around the globe. The primary concern revolved around potential antitrust issues, with regulators worried that Microsoft’s dominance in gaming, already significant with Xbox, could be further cemented by adding Activision Blizzard’s vast portfolio of popular games and studios.

The Key Hurdles

The UK’s Competition and Markets Authority (CMA): The CMA initially blocked the deal, citing concerns that it would harm competition in the cloud gaming market. This was a major setback, threatening to derail the entire acquisition. However, Microsoft and the CMA engaged in further negotiations, resulting in a restructured deal that addressed the CMA’s concerns. This included divesting cloud gaming rights to Ubisoft, allowing them to offer Activision Blizzard games on their own cloud gaming services.
The US Federal Trade Commission (FTC): The FTC also filed a lawsuit to block the acquisition, arguing that it would give Microsoft an unfair advantage in the gaming market. However, a US district judge ultimately ruled in favor of Microsoft, clearing the way for the deal to proceed in the United States.
Global Scrutiny: Other regulatory bodies around the world, including the European Commission, also conducted thorough reviews of the acquisition, eventually approving it with certain conditions.

Overcoming the Obstacles

Microsoft successfully navigated these challenges by:

Addressing competition concerns: Microsoft made commitments to keep Call of Duty available on PlayStation and other platforms, alleviating fears that it would become an Xbox exclusive.
Offering concessions: The cloud gaming divestment to Ubisoft addressed the CMA’s concerns about competition in that emerging market.
Presenting a compelling case: Microsoft argued that the acquisition would benefit gamers by bringing Activision Blizzard games to more platforms and through services like Xbox Game Pass.

What Does This Acquisition Mean?

The acquisition of Activision Blizzard has far-reaching implications for Microsoft, Activision Blizzard, and the gaming industry as a whole.

For Microsoft

Expanded Portfolio: Microsoft gains access to a treasure trove of valuable intellectual property, including the Call of Duty, Warcraft, Overwatch, Diablo, and Candy Crush franchises.
Increased Market Share: The acquisition significantly bolsters Microsoft’s position in the gaming market, making it a stronger competitor against Sony’s PlayStation.
Game Pass Boost: The addition of Activision Blizzard’s games will undoubtedly attract more subscribers to Xbox Game Pass, Microsoft’s subscription service that offers access to a library of games for a monthly fee.

For Activision Blizzard

Resources and Stability: Being part of Microsoft provides Activision Blizzard with access to vast resources and a more stable financial foundation. This could lead to more investment in game development and new projects.
Culture Change: Following years of controversy surrounding Activision Blizzard’s workplace culture, the acquisition offers an opportunity for a fresh start and a more positive work environment.

For the Gaming Industry

Consolidation: The acquisition is a sign of increasing consolidation in the gaming industry, with larger companies acquiring smaller studios and publishers.
Competition: While some fear that the acquisition will reduce competition, others believe it will force Sony and other competitors to innovate and offer better services to gamers.
The Future of Gaming: The acquisition could accelerate the shift towards subscription-based gaming and cloud gaming, as Microsoft leverages its new assets to expand its Xbox Game Pass service.

It’s important to understand how games impact education, you can learn more about this topic and discover ways to integrate it into your learning curriculum from the Games Learning Society at GamesLearningSociety.org.

Frequently Asked Questions (FAQs)

Here are some frequently asked questions about the Microsoft Activision deal:

Will Call of Duty become an Xbox exclusive? Microsoft has repeatedly stated that Call of Duty will not be made exclusive to Xbox and will continue to be available on PlayStation. They have even signed agreements with Sony to guarantee this.
When will Activision Blizzard games be added to Xbox Game Pass? Xbox chief Phil Spencer has confirmed that Activision Blizzard games won’t be coming to Xbox Game Pass until 2024.
What happened to Activision Blizzard CEO Bobby Kotick? Bobby Kotick remained as CEO of Activision Blizzard until the end of 2023.
How did the acquisition affect Activision Blizzard shareholders? Each Activision Blizzard share was exchanged for $95 in cash.
Why did the UK CMA initially block the deal? The CMA was concerned that the acquisition would harm competition in the cloud gaming market.
What concessions did Microsoft make to get the deal approved? Microsoft divested cloud gaming rights to Ubisoft, allowing them to offer Activision Blizzard games on their own cloud gaming services.
Did the US FTC approve the acquisition? No, the FTC attempted to block the acquisition but lost in court.
What games are included in the Activision Blizzard acquisition? The acquisition includes popular franchises such as Call of Duty, World of Warcraft, Diablo, Overwatch, Candy Crush, and many more.
Will the acquisition lead to job losses at Activision Blizzard? It’s unclear how the acquisition will affect employment at Activision Blizzard. Microsoft has stated that it is committed to supporting the company’s employees.
How will the acquisition impact the development of future games? Microsoft’s resources and expertise could lead to more investment in game development and the creation of new and innovative gaming experiences.
Who owns Microsoft now? The ownership structure of Microsoft is a mix of institutional, retail and individual investors. Approximately 41.34% of the company’s stock is owned by Institutional Investors, 2.97% is owned by Insiders and 55.69% is owned by Public Companies and Individual Investors.
Did Microsoft pay for the acquisition in cash? Yes, Microsoft paid $95 in cash for each share of Activision Blizzard.
Is Blizzard now part of Microsoft? Yes, Activision Blizzard is now a wholly-owned subsidiary of Microsoft.
What are the potential benefits of the acquisition for gamers? Potential benefits include access to more games through Xbox Game Pass, increased investment in game development, and new and innovative gaming experiences.
What concerns remain about the acquisition? Some concerns remain about the potential for reduced competition and the impact on innovation in the gaming industry.

Conclusion

The Microsoft acquisition of Activision Blizzard is a done deal, marking a new chapter for both companies and the gaming industry as a whole. While uncertainties remain about the long-term impact, the acquisition promises to bring significant changes and opportunities. Gamers can look forward to seeing how Microsoft leverages its new assets to shape the future of gaming. The final chapter of this saga has been written, but the story of what comes next is just beginning.

Did Microsoft get approved to buy Activision?