Microsoft Completes $69 Billion Activision Deal After UK Approval
Microsoft’s Expansion in the Gaming Market
Xbox maker Microsoft has successfully closed its $69 billion deal for Activision Blizzard, solidifying its position in the video-gaming industry. This acquisition allows Microsoft to compete more effectively with industry leader Sony by gaining access to best-selling titles such as “Call of Duty.” The deal, which was originally announced in January 2022, overcame its final obstacle with the approval from Britain. To address competition concerns, Microsoft agreed to sell streaming rights for Activision’s games.
Significance for Microsoft
The completion of this deal marks a significant milestone for Microsoft’s gaming division. By acquiring Activision Blizzard, Microsoft aims to attract more users to its Xbox consoles and Game Pass subscription service. While Sony’s PlayStation consoles currently outsell Xbox, Microsoft hopes to bridge this gap with the abundance of content now available through the acquisition.
“Today is a good day to play,” exclaimed Microsoft Gaming CEO Phil Spencer on the X social media platform (formerly known as Twitter). He will oversee the Activision business, with Bobby Kotick, the CEO of the video-game publisher, remaining in his position until the end of 2023. Spencer views this acquisition as a strategic move for Microsoft to tap into the rapidly growing mobile gaming market, which is estimated to be worth over $90 billion.
Regulatory Challenges
Despite receiving approval from Britain, Microsoft still faces opposition from the U.S. Federal Trade Commission (FTC). The FTC, which failed in its previous attempt to block the purchase, is currently focused on its appeal but will assess Microsoft’s agreement with Ubisoft Entertainment. Analysts believe that any challenges from the FTC will result in minimal impact, leading to only minor concessions in the future.
The main hurdle for the deal came from Britain’s Competition and Markets Authority (CMA), which initially blocked the acquisition in April due to concerns about Microsoft’s potential dominance in the emerging cloud gaming market. The CMA’s approval is seen as a testament to its commitment to maintaining competition, consumer benefits, and economic growth. The regulator praised Microsoft’s concession to sell streaming rights, emphasizing that it prevents the tech giant from monopolizing the UK’s cloud gaming industry.
Conclusion
With the completion of the Activision deal, Microsoft has positioned itself as a formidable player in the gaming market. This acquisition not only strengthens its gaming division but also opens doors to the lucrative mobile gaming sector. While regulatory challenges remain, the future looks promising for Microsoft as it continues to expand its influence in the gaming industry.
