Microsoft has successfully completed its acquisition of video game-maker Activision Blizzard for a whopping $69 billion. This marks one of the most expensive tech acquisitions in history and is expected to have a significant impact on the video game industry. The deal has received final approval from Britain’s competition watchdog, following their earlier decision to block the acquisition. With this acquisition, Microsoft gains control over popular game studios such as Call of Duty, Diablo, and Overwatch—a major boost for its Xbox gaming console, which currently ranks third in sales behind PlayStation and Nintendo.
In addition to strengthening its position in the gaming market, Microsoft also has grand plans to incorporate Activision’s titles into its multi-game subscription service, similar to Netflix but for video games. The nearly 22-month-long process to finalize the deal was mainly due to concerns from rivals and government regulators, who were worried about Microsoft’s potential monopoly over the industry. This acquisition is part of a larger trend of consolidation within the gaming industry, raising concerns for independent game developers who fear being overshadowed by major franchises that have a history of success.
Venture capital firm Konvoy’s managing partner, Josh Chapman, believes that the deal will ultimately benefit gamers and the overall gaming industry. On the flip side, George Jijiashvili, a senior principal analyst at tech research and advisory firm Omdia, states that the acquisition significantly shifts the balance of power in favor of Microsoft. With its Xbox console lagging behind Sony’s PlayStation and Nintendo, Microsoft now has a major opportunity to shape the future of the games industry. The acquisition process involved obtaining approvals from antitrust authorities across more than 40 countries, with the crucial approval from the European Union coming after Microsoft agreed to allow users and cloud gaming platforms to stream its titles without paying royalties for the next decade.
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However, the acquisition faced resistance from regulators in the UK and the US who were concerned about potential anti-competitive effects in the video game industry. Sony, a top rival of Microsoft, also expressed concerns over the impact on PlayStation gamers’ access to the iconic Call of Duty franchise. The US Federal Trade Commission attempted to pause the deal to allow for further review, but their request was denied. Despite the deal being closed, the FTC has not given up and plans to appeal the decision. This indicates their intention to undo the acquisition even after its completion.
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