Microsoft has concluded its $69 billion (£56 billion) acquisition of Call of Duty developer Activision Blizzard, the largest acquisition in gaming history.
Microsoft, the owner of the Xbox gaming console, was given the go-ahead for the global transaction after it was approved by UK regulators.
After blocking the initial proposal, the Competition and Markets Authority said its concerns had been addressed.
Phil Spencer of Microsoft described the acquisition of Activision as “incredible.”
Activision Blizzard CEO Bobby Kotick affirmed in a letter to employees that he would step down at the conclusion of 2023 following the announcement of the deal.
“I have long said that I am fully committed to helping with the transition,” according to him. “[Phil Spencer and I] both look forward to working together on a smooth integration for our teams and players.”
Mr. Spencer, the chief executive of Microsoft Gaming, sought to reassure enthusiasts despite the concerns of competitors such as PlayStation-maker Sony and regulators regarding competition in the gaming industry.
“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,” Mr. Spencer said in a statement following the acquisition.
Because when everyone participates, we all benefit. We believe that today’s news will unleash a universe of opportunities for more ways to play.”
Maintain rates
Under the revised agreement, Microsoft has transferred to French video game publisher Ubisoft the rights to distribute Activision’s games on consoles and PCs via the cloud.
Having made a concession, Microsoft will now control games such as Call of Duty, World of Warcraft, and Candy Crush, which will generate enormous revenues for the company.
The CMA stated that the revised agreement would “maintain competitive pricing” in the gambling industry as well as provide more options and superior services.
However, despite approving the acquisition, the watchdog criticized Microsoft’s behavior during the nearly two-year battle.
“Businesses and their advisors should have no doubt that Microsoft’s tactics are not the way to engage with the CMA,” said CMA CEO Sarah Cardell.
“During our initial investigation, Microsoft had the opportunity to restructure, but instead continued to insist on a suite of measures that we told them would not work. This method of proceeding is a waste of time and money.”
Microsoft’s major announcement – what you need to know
After the competition watchdog blocked the takeover earlier this year, Microsoft’s president Brad Smith criticized the CMA’s decision, which he claimed was “bad for Britain” and ran counter to “the UK’s ambitions to become an attractive place to build technology businesses.”
It has generated controversy and received mixed reactions from regulators around the globe, but it has already been approved by European Union regulators. The US competition watchdog’s attempt to halt the acquisition was recently denied by the courts.
With the sale of Activision’s cloud streaming rights to Ubisoft, the developer of Assassin’s Creed, the CMA’s Ms. Cardell stated, “we have ensured that Microsoft does not have a stranglehold over this important and rapidly developing market.”
“We were clear that that deal couldn’t go ahead, because it would have harmed competition, and that would have been bad for UK gamers,” according to her.
“We take our decisions free from political influence and we won’t be swayed by corporate lobbying.”
“Final obstacle cleared”
Microsoft, according to Mr. Smith, is “grateful for the CMA’s comprehensive review and decision.”
Microsoft is paying cash for Activision at a premium price of $95 per share, indicating that Mr. Kotick, Activision’s outgoing CEO, will receive $400 million and Mr. Kelly will receive $100 million based on the shares they own.
Microsoft has consented to transfer the rights to stream Activision games from the cloud to Ubisoft for 15 years outside the European Economic Area (EEA) per the restructured agreement. This includes EU nations in addition to Iceland, Liechtenstein, and Norway.
Ubisoft will no longer retain the cloud gaming rights for Activision’s content following the expiration of the 15-year period, but it is understood that the regulator believes the time period will allow competitors to establish themselves, thereby making the cloud gaming market more competitive.
Microsoft is optimistic that the acquisition will increase demand for its Xbox console and enable the company to add more titles to its Xbox Game Pass service, where members pay a monthly charge to access a library of games from the cloud – either by downloading or streaming.
With the acquisition of Activision’s mobile-focused studio, Microsoft intends to build upon the success of titles like Candy Crush.
The acquisition could propel Microsoft past Nintendo to become the third-largest participant in the video game industry, behind Sony, the owner of the PlayStation console, and industry leader Tencent.
Sony vehemently opposed this agreement out of concern that major Activision titles, such as Call of Duty, could become Xbox-exclusive in the future.
Sony’s PlayStation currently outsells Microsoft’s Xbox, but as with all entertainment platforms, the key to success is access to the finest content. Sony is also willing to acquire successful studios.
“More options”
Consultant and former commercial director of cloud services provider UK Cloud Nicky Stewart stated that the decision to sanction the takeover was “excellent news for gamers.”
“[It will lead to] more options, more innovation, better value, and enhanced gaming experiences, as well as a healthy, competitive market,” stated Ms. Stewart, a former ICT chief at the Cabinet Office.
“The CMA has compelled Microsoft to make concessions in the United Kingdom that no other regulator has.” This is excellent news for the United Kingdom’s burgeoning gaming industry.”
Leave a Reply