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Activision Blizzard's shareholders approved of the acquisition near-unanimously in April 2022. The deal was set to close by July 18, 2023, after which Microsoft would owe Activision Blizzard $3 billion if the deal failed to close.
Oct 13, 2023 · Oct 13, 2023, 5:46 AM PDT. Microsoft has finalized its $68.7 billion deal to acquire Activision Blizzard, the publisher of Call of Duty , World of Warcraft, and Diablo. The...
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Jan 18, 2022 · January 18, 2022 | Microsoft News Center. Legendary games, immersive interactive entertainment and publishing expertise accelerate growth in Microsoft’s Gaming business across mobile, PC, console and cloud.
Oct 13, 2023 · Oct. 13, 2023. Microsoft said on Friday that it had closed its $69 billion purchase of the video game giant Activision Blizzard, overcoming significant regulatory hurdles in Britain and the...
- It's been a long, long road.
- First Concerns Raised by U.S. Senators
- Wall Street Questions Viability Despite Shareholder Approval
- UK's Competitions and Markets Authority Launches Investigation
- Call of Duty Becomes the Centre of Debates
- CMA Raises More Concerns as Xbox and PlayStation Squabble
- The Federal Trade Commission Enters the Fray
- European Union Issues Antitrust Warning
- CMA's Provisional Report Says Deal Could Harm Gamers
- CMA Blocks Microsoft's Acquisition of Activision Blizzard
By Ryan Dinsdale
Updated: Oct 13, 2023 1:20 pm
Posted: Oct 13, 2023 1:09 pm
After one year, eight months, and 26 days, Xbox has finally completed its acquisition of Activision Blizzard, meaning it now owns premium video game franchises including Call of Duty, Overwatch, and Diablo.
Microsoft announced its intention to buy Activision Blizzard on January 18, 2022 but unlike its relatively smooth acquisitions of studios like Starfield and Fallout maker Bethesda, the historic $68.7 billion deal was almost brought to a halt several times.
The deal seemed doomed at times, with the United States' Federal Trade Commission (FTC), European Union, and UK's Competitions and Markets Authority (CMA) all bearing down on Xbox and Activision Blizzard. The pair emerged successful, however, as the deal was finally closed on October 13, 2023.
The first in a long line of concerns surrounding the Activision Blizzard acquisition arrived on April 1, 2022 as four U.S. senators including Bernie Sanders wrote a letter to the Federal Trade Commission (FTC) challenging consolidation in the tech industry.
Sanders alongside Elizabeth Warren, Cory Booker, and Sheldon Whitehouse, wrote they were "deeply concerned" about the deal's impact on workers. The senators referenced the wave of sexual harassment and other allegations issued against Activision Blizzard, saying the acquisition could "further disenfranchise these workers and prevent their voices from being heard."
What could have been a strong step forward for the deal only raised more questions as, on April 28, 2022, 98% of Activision Blizzard shareholders voted to approve the company's acquisition by Microsoft.
The deal was approved at $95 a share, but shareholders grew concerned as this number had been slowly lowering at the time to the low $80 range and as low as $75.60 on April 29. This was interpreted by some as a lack of shareholder confidence around the deal's ability to ultimately pass.
What would become the biggest hurdle for Microsoft and Activision Blizzard to overcome began on July 6, 2022 as the UK government's Competitions and Markets Authority (CMA) announced an investigation into the deal.
Responsible for ensuring fair competition between businesses in the UK, the CMA said it intended to "consider whether the deal could harm competition and lead to worse outcomes for consumers", citing concerns around high prices, lower quality products, and reduced choice.
As an Activision Blizzard game and the most popular release each year, Call of Duty quickly became the centre of conversations surrounding the deal. While questions were raised from day one, and Microsoft and Sony threw accusations and condemnations towards each other fairly regularly, actual possibilities surrounding exclusivity only emerged later.
On September 1, 2022 as the CMA recommended a second phase investigation into the deal, Microsoft said Xbox Game Pass would receive new Call of Duty games day one, but this wouldn't impact their launch on PlayStation. Talks between the console competitors began behind the scenes too, with Xbox allegedly offering to bring Call of Duty to PlayStation for three years beyond the current contract.
An update from the CMA on October 12, 2022 raised several areas in which the competition regulator had concerns over the deal. "There is a realistic prospect of a substantial lessening of competition in gaming consoles, multi-game subscription services, and cloud gaming services," the regulator said.
The increased scrutiny from the CMA triggered a wave of new arguments from both Xbox and PlayStation, as the former tried desperately to see the deal through and the latter sought to block it. This led to many unusual statements over the next couple of months from Microsoft in particular.
Xbox essentially called PlayStation too big to fail, for example. "While Sony may not welcome increased competition, it has the ability to adapt and compete," it said, adding that Xbox has a "number of significant disadvantages" in streaming. Microsoft president and vice chairman Brad Smith also said Xbox's acquisition of Activision Blizzard was fair because PlayStation has significantly more exclusive games.
Looking to put the Call of Duty argument to bed (though it continued for several more months), Xbox boss Phil Spencer said on October 31 the company would continue to release the shooter on PlayStation "as long as there's a PlayStation out there to ship to". This was followed by an offer from Xbox on November 11 to keep Call of Duty on Sony's consoles for ten years alongside similar commitments to Nintendo.
In what appeared at the time to be the biggest hurdle for Microsoft at the time, the United States' Federal Trade Commission sued to block Xbox's acquisition of Activision Blizzard. In a statement, the agency said Xbox would "gain control of top video game franchises" and therefore "harm competition in high-performance gaming consoles and subscriptions services by denying or degrading rivals’ access to its popular content."
The FTC pointed to Microsoft's history of acquisitions and making those games exclusives, like it did with Bethesda and games including Starfield and Redfall. Xbox again remained confident, however, with Microsoft president Brad Smith saying it will "continue to believe that [its] deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers".
The European Union became the latest government body to target the deal on February 3, 2023 when it issued a formal antitrust warning to Microsoft. The statement of objections was not made public but the EU had previously raised concerns over the exclusivity of Call of Duty.
Microsoft said it was still committed to "finding a path forward" for the deal. "We are listening carefully to the European Commission's concerns and are confident we can address them," a spokesperson said at the time.
Just days after the European Union issued its antitrust warning, the CMA delivered a blow of its own by stating the Microsoft and Activision Blizzard deal could harm gamers. Outlined in its provisional report on February 8 the CMA reiterated several previously mentioned complaints alongside the impact on cloud gaming.
It noted that Microsoft already accounts for 60% to 70% of this market, and adding the likes of Call of Duty to their current Cloud offerings in an exclusive manner could "alter the future of gaming" and potentially harm UK gamers.
Microsoft and Activision responded to the claims, with the former promising again that it will bring Call of Duty to other platforms. "When we say equal, we mean equal. Ten years of parity. On content. On pricing. On features. On quality. On playability," Microsoft added.
Activision also remained hopeful about its ability to convince the CMA of the deal's consequences. "These are provisional findings, which means the CMA sets forth its concerns in writing, and both parties have a chance to respond," it said. Putting its money where its mouth is, Microsoft signed a ten year deal with Nintendo to bring Call of Duty to its platforms on February 21.
Though things seemed to be going a little better for Microsoft on March 24, 2023, when the CMA announced it was now less concerned about the Activision Blizzard deal going through, the competition regulator surprised the industry when it moved to block the deal on April 26.
Its official verdict came without PlayStation's complaints or Call of Duty exclusivity at the forefront, however, as cloud gaming instead emerged as the main reason for blocking the acquisition. "The deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come," the CMA said.
It added that Microsoft failed to provide a solution to its concerns over the deal's impact on the cloud gaming market.
Microsoft retaliated by saying it would appeal the decision, saying it is "disappointed" by the result that "appears to reflect a flawed understanding of this market". Microsoft president Brad Smith spoke out against the CMA the following day, saying "people's confidence in technology in the UK has been severely shaken".
- Ryan Dinsdale
Oct 13, 2023 · Updated Fri, Oct 13, 2023, 9:56 AM 4 min read. In this article: MSFT. SNEJF. SONY. Microsoft ( MSFT) on Friday finalized its $69 billion purchase of "Call of Duty" maker Activision Blizzard (...
- 3 min
- Alexis Keenan
Oct 13, 2023 · Oct. 13, 2023 Updated 8 AM PT. Microsoft acquired gaming giant Activision Blizzard on Friday, closing the biggest deal in video game history after more than a year of close scrutiny from...
