How the biggest deal in gaming history was finally completed
Following a drawn-out saga which saw it forced to negotiate a series of tricky obstacles, Microsoft has officially sealed the largest deal in gaming history.
The tech giant has purchased Activision Blizzard, maker of many of the world's most successful and popular games, for an eye-watering sum of US$68.7 billion.
It comes after the UK’s Competition and Markets Authority – which called a halt earlier this year due to fears of “reduced innovation and less choice for UK gamers” – decided it was satisfied with a revised deal.
A delighted Phil Spencer, CEO of Microsoft Gaming, said: “As one team, we’ll learn, innovate, and continue to deliver on our promise to bring the joy and community of gaming to more people.
“We’ll do this in a culture that strives to empower everyone to do their best work, where all people are welcome, centred on our ongoing commitment of ‘Gaming for Everyone’.”
He added: “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 favourite franchise.”
Microsoft-Activision saga finally at an end
Microsoft’s big-money purchase of Activision Blizzard, maker of Call of Duty and World of Warcraft, had initially been expected to go through without any problems and become the largest takeover in gaming history.
However, in April, the CMA blocked the deal, stating Microsoft had failed to effectively address concerns outlined in its provisional findings in February, mainly relating to the rapidly-growing cloud gaming market.
Also playing into the dispute was Call of Duty and worries from Microsoft’s big rival, Sony, that the mega-franchise may no longer be made available to PlayStation users.
As a result, Microsoft set out a host of “behavioural” remedies setting out which games it must offer and the platforms on which they must be offered over the next 10 years.
But the CMA said the proposal still contained “a number of significant shortcomings” relating to cloud gaming, which largely boiled down to Microsoft having too much perceived power in the market.
Further obstacles for Microsoft in Europe and US
Meanwhile, the European Commission expressed similar concerns, but ultimately approved the deal in May after accepting the remedies from Microsoft in relation to cloud gaming and licensing agreements.
It said any issues had been “fully addressed” by Microsoft’s remedies, representing a “significant improvement for cloud game streaming compared to the current situation”.
Things appeared to be on the right track when, in July, the tech giant won a crucial court case against the Federal Trade Commission (FTC), which was seeking an injunction to temporarily block the deal while it carried out further investigations.
Microsoft was still seeking crucial approval from the CMA, however, and said in August it had restructured its proposal.
And now, the CMA has opted to sanction the transaction, agreeing the revised terms “would preserve competitive prices and better services”.
Conditions of the deal mean Microsoft will not be able to release Activision Blizzard games exclusively on Xbox Cloud Gaming or exclusively control the licensing terms of Activision Blizzard games for rival services.
******
For more business insights, check out the latest edition of Business Chief US and Canada and be sure to follow us on LinkedIn and Twitter.
You may also be interested in the Business Chief UK & Europe website.
BizClik is a global provider of B2B digital media platforms that cover executive communities for CEOs, CFOs and CMOs, as well as leaders in Sustainability, Procurement & Supply Chain, Technology & AI, Cyber, FinTech & InsurTech. We also cover industries including Manufacturing, Mining, Energy, EV, Construction, Healthcare and Food & Drink.
BizClik, based in London, Dubai and New York, offers services such as content creation, advertising and sponsorship solutions, webinars and events.
