After facing several regulatory hurdles, Microsoft completed its $69 billion acquisition of Activision Blizzard this Friday (10/13), marking the creation of a giant company in the world of video games.
Expressing gratitude for the “meticulous review and decision,” Microsoft claims that the combined companies “will benefit gamers and the gaming industry around the world,” in the words of president Brad Smith.
Historic acquisition
Microsoft, with its history of acquisitions, makes the deal with Activision Blizzard its largest purchase to date, and it is also the largest merger and acquisition deal since AOL acquired Time Warner more than two decades ago. The acquisition triggered antitrust reviews in several parts of the world, just as Activision Blizzard was taking steps to address allegations of sexual misconduct and harassment within the company.
Although Microsoft was already a successful player in the video game console market, the union with Activision Blizzard, one of the industry’s leading content creators, known for successful franchises such as “Call of Duty”, “World of Warcraft” and Overwatch ” represents a significant step forward for the company, combining Xbox operations with Activision Blizzard’s diverse offerings and an established player base.
Obstacles are overcome
The acquisition met with much resistance internationally and was confirmed just hours after approval from the UK’s main competition watchdog.
The main concern was that the merger could give rise to anti-competitive practices in the gaming market, particularly in the emerging cloud gaming market. Authorities feared that the merger of the two giants could limit competition, given that Microsoft already has a significant presence with its Xbox console and cloud gaming service, Xbox Cloud Gaming.
The fear was that Microsoft might limit gamers’ access to certain titles or services, or that prices for games and related services might increase, harming consumers.
In the United States, the Federal Trade Commission (FTC) even considered legal action to block the deal, arguing that it could have a negative effect on competition. However, a judge ultimately ruled in favor of Microsoft and Activision Blizzard, allowing the companies to proceed with the merger.
The final approval of the acquisition, despite the obstacles, can be seen as a signal that, although the authorities are increasingly attentive to the possible anti-competitive effects of large mergers, there is still room for large-scale deals in the technology sector and of games.
However, the FTC announced that it will appeal the court’s decision on the settlement. An FTC spokesperson said: “We remain focused on the federal appeals process despite Microsoft and Activision completing their settlement ahead of an appeal hearing scheduled for December.”
Source: Terra
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