Is Microsoft Allowed to Buy Activision Blizzard? The Final Verdict and What it Means
The short answer is: Yes, Microsoft is now essentially allowed to buy Activision Blizzard. After a protracted and closely watched regulatory battle, the final major hurdle – the UK’s Competition and Markets Authority (CMA) – has given its approval to a restructured deal. This marks the end of a saga that has redefined the landscape of the video game industry and raised profound questions about the future of competition in the tech world. Let’s delve into the details.
The Road to Approval: A Regulatory Rollercoaster
The journey to this point has been anything but smooth. When Microsoft initially announced its intention to acquire Activision Blizzard for a staggering $68.7 billion, it sent shockwaves throughout the industry. The deal promised to bring iconic franchises like Call of Duty, World of Warcraft, and Overwatch under Microsoft’s umbrella, bolstering its Xbox Game Pass service and significantly increasing its market share.
However, regulators around the globe immediately raised concerns. The core issue was the potential for anticompetitive practices, particularly concerning the future of cloud gaming. Could Microsoft leverage its dominance to restrict access to Activision Blizzard games on rival platforms? This fear led to investigations and legal challenges, most notably from the US Federal Trade Commission (FTC) and the UK CMA.
The FTC’s attempt to block the deal was ultimately unsuccessful, with a US court ruling against the agency. However, the CMA initially blocked the acquisition in the UK, citing concerns about the impact on cloud gaming competition. This led to a period of intense negotiation and restructuring, culminating in a revised deal designed to address the CMA’s concerns.
The Restructured Deal: What Changed?
The key modification to secure the CMA’s approval involves the transfer of cloud streaming rights for Activision Blizzard games in the UK and the European Economic Area (EEA) to Ubisoft. This means that Ubisoft, rather than Microsoft, will control the cloud streaming rights for these games in those territories for the next 15 years.
This arrangement is designed to foster competition in the cloud gaming market by ensuring that other platforms and services have access to Activision Blizzard’s titles. It effectively prevents Microsoft from creating a closed ecosystem where these games are exclusive to its own cloud gaming service. The CMA ultimately deemed this restructured deal acceptable, paving the way for the acquisition to proceed.
Implications for the Gaming Industry and Beyond
The Microsoft-Activision Blizzard deal has far-reaching implications for the gaming industry and the broader tech landscape. Here are some key takeaways:
- Consolidation Continues: This acquisition signals a continuing trend of consolidation in the gaming industry, with major players acquiring studios and franchises to strengthen their positions.
- Cloud Gaming is the Future (Maybe): The regulatory scrutiny surrounding cloud gaming highlights its growing importance. While still relatively nascent, cloud gaming is seen as a potential game-changer, offering players access to games on any device without the need for expensive hardware.
- Regulatory Scrutiny Intensifies: The extensive regulatory review of this deal demonstrates the increasing attention that tech acquisitions are receiving from antitrust authorities. This could make future large-scale acquisitions more challenging.
- Xbox Game Pass Dominance: Microsoft will undoubtedly leverage Activision Blizzard’s content to enhance its Xbox Game Pass service, making it an even more attractive offering for gamers.
- Future of Call of Duty: One of the biggest questions revolves around the future of Call of Duty. While Microsoft has pledged to keep Call of Duty multiplatform, the possibility of exclusive content or features for Xbox remains a concern for PlayStation gamers.
- Games as a Platform for Learning: The evolution of gaming and game technologies has significant potential to shape education and learning experiences. Organizations like the Games Learning Society are researching and promoting the use of games for educational purposes. More information about their work can be found at GamesLearningSociety.org.
Frequently Asked Questions (FAQs)
Here are 15 frequently asked questions related to the Microsoft-Activision Blizzard acquisition:
1. What is Activision Blizzard?
Activision Blizzard is a major video game holding company responsible for some of the most popular game franchises in the world, including Call of Duty, World of Warcraft, Overwatch, Diablo, and Candy Crush.
2. Why did Microsoft want to buy Activision Blizzard?
Microsoft aimed to acquire Activision Blizzard to bolster its Xbox Game Pass service, gain access to valuable intellectual property, and strengthen its position in the gaming market, particularly in mobile gaming.
3. What were the main concerns raised by regulators?
Regulators primarily worried about anticompetitive practices, specifically the potential for Microsoft to restrict access to Activision Blizzard games on rival platforms, especially in the cloud gaming market.
4. What is cloud gaming?
Cloud gaming allows players to stream games over the internet to various devices without the need to download or install them locally. It eliminates the need for expensive gaming hardware.
5. What is the role of the FTC in this deal?
The US Federal Trade Commission (FTC) attempted to block the acquisition, arguing that it would harm competition in the gaming market. However, a US court ultimately ruled against the FTC.
6. What is the role of the CMA in this deal?
The UK’s Competition and Markets Authority (CMA) initially blocked the acquisition due to concerns about the impact on cloud gaming competition in the UK.
7. What changes were made to the deal to satisfy the CMA?
The restructured deal involves the transfer of cloud streaming rights for Activision Blizzard games in the UK and the EEA to Ubisoft for 15 years.
8. How does the Ubisoft deal address the CMA’s concerns?
The Ubisoft deal ensures that other cloud gaming platforms have access to Activision Blizzard games in the UK and the EEA, preventing Microsoft from creating a closed ecosystem.
9. What does this acquisition mean for PlayStation gamers?
While Microsoft has pledged to keep Call of Duty multiplatform, PlayStation gamers may be concerned about the possibility of exclusive content or features for Xbox platforms in the future.
10. Will Call of Duty become an Xbox exclusive?
Microsoft has stated that it intends to keep Call of Duty available on PlayStation platforms. However, the specifics of future Call of Duty releases and content offerings remain to be seen.
11. What will happen to Activision Blizzard employees?
The acquisition could lead to some restructuring within Activision Blizzard, but Microsoft has indicated that it values the company’s talent and expertise.
12. How will this acquisition affect Xbox Game Pass?
The addition of Activision Blizzard’s games will significantly enhance the Xbox Game Pass library, making it an even more attractive offering for subscribers.
13. What is the future of esports after this acquisition?
The acquisition could have a positive impact on esports by providing more resources and investment for Activision Blizzard’s esports leagues and tournaments.
14. Will this acquisition lead to higher game prices?
It’s difficult to predict the long-term impact on game prices. However, increased competition could potentially lead to lower prices or more value for consumers through services like Xbox Game Pass.
15. What are the broader implications for the tech industry?
The Microsoft-Activision Blizzard deal highlights the increasing regulatory scrutiny of tech acquisitions and the growing importance of cloud gaming in the future of the industry. This acquisition also showcases how large tech companies continue to consolidate their dominance and market power by acquiring promising studios.