Tech giant Microsoft is set to acquire video game company Activision Blizzard, following the European regulator’s approval.
The EU’s executive arm, the European Commission, disclosed that Microsoft offered remedies in the nascent area of cloud gaming that has fended off antitrust concerns. These remedies centered on allowing users to stream Activision games they purchase on any cloud streaming platform.
Recall that Microsoft had announced in January last year, its plan to acquire Activision Blizzard for $68.7 billion, which would mark the largest acquisition in the gaming industry’s history. Amid concerns about its effect on competition in the industry particularly in the nascent cloud gaming market, the U.K.’s Competition and Markets Authority determined to block the acquisition, a decision Microsoft and Activision stated that they will appeal.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
The U.K. Competition and Markets Authority opposed the deal, stating that it raises competition concerns in the nascent cloud gaming market. Also, the EU during a probe, expressed concern that Microsoft may reduce the ability of rival providers of PC operating systems to compete with Microsoft’s operating system Windows by combining Activision Blizzard’s games and Microsoft’s distribution of games via cloud game streaming to Windows.
The CMA on the other hand previously held concerns about competition in game consoles being undermined but later ruled out this concern in a preliminary decision in March.
On April 17, 2023, South Africa’s Competition Commission became the latest international regulator to approve the deal, and it disclosed that the proposed transaction was unlikely to result in a substantial prevention or lessening of competition in any relevant markets.
Notably, the EU’s latest approval of Microsoft to acquire Activision Blizzard is coming after several regulators had probed if the purchase would negatively impact competition in the console and cloud gaming market.
When the transaction is finally sealed, Microsoft will become one of the world’s largest gaming companies by revenue, behind Tencent and Sony. The acquisition will also bolster Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers.
Despite the acquisition, the CEO of Activision Blizzard Bobby Kotick will continue to serve as the CEO of the company, and his team will maintain their focus on driving efforts to strengthen the company’s culture and accelerate business growth.
Microsoft claims that the Activision Blizzard acquisition gaming deal will give gamers access to “more games on more devices including Xbox, PlayStation, phones, and online. They will also have more choice in how and where they buy games as well as with subscriptions or one-off purchases. The company also claims that the game developers will benefit as well because they’ll have access to more players, more investment, and improved revenue as well.