Tech giant Microsoft has completed its acquisition of game developer and publisher Activision Blizzard after a year and a half of tumultuous negotiations with competition regulators around the world.
Microsoft’s $68.7bn (~£50.5bn) acquisition, which was first announced in January 2022, is the largest gaming acquisition ever and sets up Microsoft as a leading player in the gaming and esports industries.
The merger saw intense scrutiny from regulators around the world, who focused on the potential harm to competition if Microsoft, which already owns Xbox, also owned one of the world’s largest game conglomerates.
Regulators argued the merger could damage competition in the console space because Microsoft could make Activision Blizzard’s highly popular franchise exclusive to its Xbox console. Investigations also focused on whether the deal would set Microsoft up for domination of the emergent cloud gaming market.
The deal hit its first obstacle in late 2022 when the US’ Federal Trade Commission (FTC) filed a lawsuit to block the deal. Over the subsequent year, it would seek a restraining order and preliminary injunction to prevent the merger from happening, both of which US courts rejected, paving the way for the FTC to renege in July and allow the deal to pass.
The UK was another significant hurdle for Microsoft, where the Competition and Markets Authority (CMA) rejected the merger in a shock April 2023 decision.
Over the course of 19 months, Microsoft offered regulators a number of concessions to make its case that competition wouldn’t be damaged, including long-term deals with rivals like Nintendo, Sony and Ubisoft. The CMA eventually approved the merger on October 13th, paving the way for the merger to officially go through later the same day.
Activision Blizzard stock has ceased trading on the NASDAQ stock exchange following the merger.
Activision Blizzard owns several esports titles including Call of Duty, Overwatch and Hearthstone as well as other major game franchises such as World of Warcraft, Diablo and mobile games such as Candy Crush through its subsidiary King.
“Today is a good day to play,” Phil Spencer, CEO of Microsoft’s gaming division Xbox, said in a company blog post. “I’ve long admired the work of Activision, Blizzard, and King, and the impact they’ve had on gaming, entertainment, and pop culture.”
The consummation of the merger comes amid uncertainty surrounding the future of Activision Blizzard’s franchised esports leagues. Overwatch League teams are soon set to vote on the future of the league following years of declining viewership and discontent amongst franchise owners over high operating costs and continually missed promises on revenue.
Microsoft’s acquisition announcement in January 2022 notably came during a period of turbulence rocking Activision Blizzard, after the game developer was embroiled in sexual harassment lawsuits, allegations of a toxic and sexist workplace culture and union-busting concerns.
