Microsoft Finally Closes $69 Billion Activision Deal After Months Of Regulatory Challenges!

It’s here.

It’s finally here.

It’s taken a while but Microsoft has finally done it!

#WhatAreWeOnAbout

Microsoft has an announcement (that we’re building up suspense for!) that will boost its entrance into an over $90-billion mobile game market and drive more people to its Xbox gaming consoles and its subscription service, Game Pass.

What’s the latest move all about? Let’s explore:
 

What Is The Announcement?

 

• In another Friday the 13th tale (albeit a non-evil one), Microsoft finally closed its $69 billion deal to acquire Activision Blizzard King! 

• This comes after Microsoft overcame one of the main hurdles it faced in the form of the UK’s competition regulator Competition and Markets Authority (CMA), which voiced competition concerns regarding the cloud gaming market and more over time (read more).

• On Friday, however, Microsoft finally received approval from the CMA after they agreed to sell the streaming rights for Activision’s games.

• Microsoft even filed the Form 8-K with the United States Securities and Exchange Commission.

• Having made their intent to acquire the gaming giant in January 2022, Microsoft has had to wait more than 20 months to gain additional footing in the gaming industry, particularly against their competitor, Sony.

• It’s been a rough ride for Microsoft to reach their destination, having to make various concessions to get it over the line. These include giving European Economic Area consumers free licenses to stream Activision Blizzard games.

• Furthermore, Microsoft signed deals with Nintendo and Sony (their console rivals), which gives them access to Call of Duty, one of Activision Blizzard’s most popular games, for 10 years. Similar agreements have been made with cloud-gaming providers like Boosteroid, Nvidia, Nware and Ubitus, as per reports.

• However, mobile games like Candy Crush Saga and Call of Duty Mobile were excluded from a deal signed with Ubisoft.

 

How Does This Deal Benefit Microsoft?

 

• For one, Microsoft and Xbox get their hands on some of the biggest titles in the world of video games, which include Call of Duty, Crash Bandicoot, Warcraft, Overwatch, Diablo, StarCraft, Candy Crush, Bubble Witch, Tony Hawk Pro Skater, Pet Rescue and Farm Heroes. 

• For another, the latest fiscal year for Activision Blizzard witnessed revenue of $7.5 billion! Add that to Microsoft’s $212 billion sales figures and it’s quite a tasty earning.

• According to Michael Pachter, an analyst with Wedbush Securities, "Microsoft instantly has more than $3 billion of mobile revenues."

• Pachter further added, "The big benefit is that Microsoft has a vision that they are going to deliver games through a subscription, and they need more content to give subscribers. So, this is a big step toward having sufficient content."

 

What Did The Stakeholders Have To Say?

 

• Through a blog post released on Microsoft’s Xbox Wire website page, Phil Spencer, the CEO of Microsoft Gaming, conveyed the news of the acquisition and addressed fans of the production house.

• Spencer said, “Together, we’ll create new worlds and stories, bring your favorite games to more places so more players can join in, and we’ll engage with and delight players in new, innovative ways in the places they love to play including mobile, cloud streaming and more.”

• [Contd.] “Players have always been at the center of everything we do. And as we grow, we’ll continue to keep players at the heart of it all."

• [Contd.] “For the millions of fans who love Activision, Blizzard, and King games, we want you to know that today is a good day to play. You are the heart and soul of these franchises, and we are honored to have you as part of our community.”

• [Contd.] “Whether you play on Xbox, PlayStation, Nintendo, PC or mobile, you are welcome here – and will remain welcome, even if Xbox isn’t where you play your favorite franchise. Because when everyone plays, we all win.”

While the delay caused by the CMA is now overcome, the deal is still being scrutinized by the US Federal Trade Commission (FTC), which failed to block the purchase in a previous attempt but said it would “assess” the new agreement with Ubisoft.

However, analysts believe it won’t impact the deal much other than future incremental concessions. Do you think the concessions are enough to maintain healthy competition in the sector? Will smaller video game studios and companies suffer through the Microsoft-Activision deal?

Let us know in the comments below!