Microsoft has finally closed their deal to acquire and merge with Activision Blizzard King.
In a new blog post on Xbox Wire, Phil Spencer has officially confirmed the merger, sharing these words for all gamers:
“For the millions of fans who love Activision, Blizzard, and King games, we want you to know that today is a good day to play. You are the heart and soul of these franchises, and we are honored to have you as part of our community. Whether you play on Xbox, PlayStation, Nintendo, PC or mobile, you are welcome here – and will remain welcome, even if Xbox isn’t where you play your favorite franchise.
Because when everyone plays, we all win. We believe our news today will unlock a world of possibilities for more ways to play. Thank you for the ongoing support. We have so much more to come in the months ahead – I’m excited for the future and cannot wait to share it with you.”
This caps off what is practically a two year journey for this merger, starting with Microsoft’s public announcement of their intent to acquire Activision, last January 18, 2022.
The deal is the largest video game acquisition, in terms of transaction value. It brings a broad umbrella of legacy and popular games, including Call of Duty, Diablo, Overwatch, Tony Hawk’s Pro Skater, Candy Crush, and more, under Microsoft’s purview.
Microsoft has justified this purchase by revealing big plans to enter mobile gaming. They hope to take advantage of future regulation affecting Apple and Android, that will allow Microsoft and others to open third party stores in Apple and Android devices.
In spite of their statement, of course, this acquisition gives Microsoft a lot of power and potential revenue immediately. On their own, Call of Duty and Candy Crush are reliable money makers year after year.
The deal has faced a lot of criticism, amid fears that game companies are taking on too much risk via consolidation. However, it has also received support from many sectors and stakeholders. That includes other game companies, many of whom are Microsoft’s and Activision’s competitors. It even includes union groups like the CWA, who see an opportunity for better negotiation with Microsoft than with Activision’s current leadership.
Most regulators greenlit the deal without reservations. However, Microsoft and Activision faced strict regulation from the three biggest regions relevant to this merger; the UK, Europe, and of course, the US.
While most observers remember that the EU approved the deal, this came after the EU extended their investigation that started in September 2022, and filed a formal complaint against it in February 2023. Approval came in May 15, 2023, after several concessions, that turned out to be specific to their region.
The US was where the deal would actually be signed, and theoretically would be most capable of blocking it. But several unusual factors changed the way this deal was regulated there. This deal should have been reviewed by the Department of Justice, but after several US senators expressed concerns about the merger to the FTC, the FTC took up the matter themselves.
The FTC tried to lodge serious actions to delay and block the deal. However, when they filed their federal case to block the deal with an injunction, Judge Jacqueline Scott Corley would decide to deny that injunction on June 13, 2023. Ironically, the FTC’s strongest move would end up benefiting Microsoft and Activision.
The CMA initially rejected the deal on April 26, 2023, after their own extended investigation. Unfortunately for them, their decision became a political issue, as it had come out immediately after EU approved the deal. Members of Rishi Sunak’s government would criticize the CMA in person and in public statements, as it seemed to go against Sunak’s plans to make UK a major tech leader in the world.
In the end, CMA became reactive, as they agreed to talk with Microsoft and work out a deal after Microsoft won their federal case. That leads us to earlier today, when they decided to accept the amended deal that includes Ubisoft as the arbiter of Activision Blizzard King’s cloud gaming rights.
While this merger brings with it a lot of hopes and fears for the video game industry, at a basic level we recognize that it will radically change everything about the industry moving forward.