Microsoft Finally Closes $69 Billion Activision Deal After Months Of Regulatory Challenges!

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Microsoft's recent announcement is a major milestone in the gaming industry. After a prolonged process, Microsoft successfully closed a $69 billion deal to acquire Activision Blizzard King, a gaming giant. This acquisition aims to bolster Microsoft's presence in the mobile gaming market, which is valued at over $90 billion, and enhance its position in the gaming industry, primarily against its competitor Sony.

The journey to this acquisition was marked by several hurdles. One significant challenge was posed by the UK's competition regulator, the Competition and Markets Authority (CMA), which had expressed concerns about competition in the cloud gaming market. Microsoft eventually secured CMA's approval by agreeing to sell the streaming rights for Activision's games. The company even filed the Form 8-K with the United States Securities and Exchange Commission, indicating its commitment to the acquisition.

Microsoft had initially declared its intention to acquire Activision Blizzard King in January 2022, and it took over 20 months to finalize the deal. Along the way, Microsoft made various concessions to overcome ...
... regulatory and competitive obstacles. These concessions included providing free licenses to stream Activision Blizzard games to European Economic Area consumers. Additionally, Microsoft struck deals with its console rivals, Nintendo and Sony, securing access to Call of Duty, one of Activision Blizzard's most popular games, for a decade. Similar agreements were reached with cloud gaming providers like Boosteroid, Nvidia, Nware, and Ubitus. Notably, the deal excluded mobile games like Candy Crush Saga and Call of Duty Mobile from a separate agreement with Ubisoft.

The acquisition of Activision Blizzard King holds substantial benefits for Microsoft. It provides Microsoft and Xbox access to some of the most renowned titles in the video game industry, including Call of Duty, Crash Bandicoot, Warcraft, Overwatch, Diablo, StarCraft, Candy Crush, Bubble Witch, Tony Hawk Pro Skater, Pet Rescue, and Farm Heroes. Activision Blizzard King reported revenue of $7.5 billion in its latest fiscal year, which, when combined with Microsoft's $212 billion in sales, represents a significant source of earnings. The acquisition also promises an immediate boost in mobile revenues, estimated to be over $3 billion.

Furthermore, Microsoft has a clear strategic vision of delivering games through subscription services, and this acquisition enhances its content library, making it more appealing to subscribers. This move aligns with Microsoft's broader plan to engage players across various platforms, including mobile and cloud streaming.

Phil Spencer, CEO of Microsoft Gaming, conveyed the news of the acquisition through a blog post on Microsoft's Xbox Wire website. Spencer emphasized the company's commitment to creating new gaming experiences and engaging with players in innovative ways, including on mobile devices and through cloud streaming. He reiterated Microsoft's dedication to putting players at the center of their endeavors, emphasizing inclusivity by welcoming players from various gaming platforms, including Xbox, PlayStation, Nintendo, PC, and mobile.

Despite overcoming the regulatory hurdle posed by the CMA, the deal is currently under scrutiny by the US Federal Trade Commission (FTC). The FTC had previously attempted to block the purchase but has now indicated that it will "assess" the new agreement with Ubisoft. However, analysts believe that this scrutiny is unlikely to have a significant impact on the deal, except for potential future concessions.

The Microsoft-Activision deal raises questions about its impact on competition in the gaming sector. Smaller video game studios and companies may face challenges as Microsoft's portfolio expands. The acquisition could potentially give Microsoft a dominant position in the industry, which might affect competition. To maintain a healthy competitive landscape, it may be necessary for regulators to monitor the deal closely and ensure that smaller players in the industry have a fair opportunity to thrive.

In summary, Microsoft's acquisition of Activision Blizzard King is a significant development in the gaming industry, allowing Microsoft to access a treasure trove of popular gaming titles and expand its presence in the mobile gaming market. The deal's strategic value lies in Microsoft's vision of delivering games through subscription services and its commitment to player-centric gaming experiences. While regulatory scrutiny remains, the acquisition has the potential to reshape the gaming industry and could impact competition among smaller gaming companies. The future will reveal how Microsoft leverages its new assets to shape the gaming landscape.

https://www.techdogs.com/tech-news/td-newsdesk/microsoft-finally-closes-69-billion-activision-deal-after-months-of-regulatory-challenges