Xbox parent Microsoft successfully completed its $75 billion acquisition of Activision Blizzard, a major video game company, on Friday, despite ongoing opposition from the Federal Trade Commission (FTC). This acquisition is the largest in the history of the video game industry. Earlier in the day, the UK’s Competition and Markets Authority (CMA) dropped its opposition, facilitating the deal’s completion. To address concerns from British regulators, Microsoft agreed to sell streaming rights to Ubisoft, a rival company.
While the acquisition has been approved in the UK, the FTC is actively working to halt the deal. Led by the antitrust advocate Lina Khan, the agency is challenging the merger in an administrative case, which will be presented to an in-house judge. Although it is seen as a long shot, if the FTC’s challenge is successful, it could force Microsoft and Activision to reverse the deal.
For Microsoft and Activision, gaining the CMA’s approval represents a significant victory after a contentious legal process lasting nearly two years, which almost derailed the merger. Microsoft even had to extend its merger agreement with Activision for three months to finalize the deal. Xbox chief Phil Spencer expressed his enthusiasm for the acquisition, saying, “Today is a good day to play. We officially welcome Activision Blizzard King to Team Xbox. Together, we’ll create stories and experiences that bring players together, in a culture empowering everyone to do their best work and celebrate diverse perspectives.”
In a separate blog post, Spencer mentioned that Microsoft would begin the process of adding Activision-Blizzard video game titles to its “Xbox Game Pass” subscription service. Microsoft’s vice chair and president, Brad Smith, expressed his gratitude for the CMA’s thorough review and decision. He believes that the acquisition will benefit players and the gaming industry worldwide.
In terms of the stock market, Microsoft’s stock rose 0.2% in morning trading on Friday.
The CMA stated that the concessions made by Microsoft, in order to obtain its approval, will prevent the tech giant from monopolizing the cloud gaming market and ensure competitive prices and services for UK customers. The CMA claimed that this outcome positions them as the only competition agency worldwide to have achieved such a result.
The New York Post has reached out to the FTC for comment. In July, the FTC’s argument that the deal would harm competition in the video game sector was rejected by US Judge Jacquelin Scott Corley of the Northern District of California. Additionally, a federal appeals court denied the FTC’s request for an immediate stay on the deal. However, the FTC has appealed this ruling.
Regarding the FTC’s internal process, the “evidentiary hearing will commence 21 days after the issuance of the district court’s decision in FTC v. Microsoft,” according to the FTC. Despite the ongoing appeal process, the FTC still considers the Microsoft-Activision merger to pose a threat to competition.
Meanwhile, Microsoft will utilize Activision’s library of content to strengthen its Xbox service as it competes with Sony, the maker of PlayStation, and Nintendo. Activision-Blizzard generated $7.5 billion in revenue in its most recent fiscal year, while Microsoft’s revenue reached $212 billion.
To address antitrust concerns, Microsoft signed 10-year agreements with Sony and Nintendo, ensuring that “Call of Duty” will remain available on their respective video game platforms.
With Post wires
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