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Microsoft Activision $69 Billion Deal Closes After Regulatory Reviews

Microsoft Activision $69 Billion Deal Closes After Regulatory Reviews

The News: Microsoft’s Activision Blizzard acquisition finally closed after more than 20 months of battles with governmental regulators around the world when British regulators gave their approval to the $69 billion deal on October 13. Microsoft first announced it was seeking to buy Activision Blizzard back in January of 2022 in a strategy that aimed to add additional popular video games, including Call of Duty and Candy Crush, to its arsenal of successful video games. Read about the completed acquisition in an October 13 story from The New York Times.

Microsoft Activision $69 Billion Deal Closes After Regulatory Reviews

Analyst Take: It certainly took a while, but Microsoft’s Activision Blizzard acquisition finally passed regulatory muster around the world, giving Microsoft two major video game names that the company coveted, among many others: Call of Duty and Candy Crush. This was no small feat for Microsoft, considering that more and more governmental regulators have been taking on the big tech companies to try to limit their power and prevent monopolies that can hurt consumers and threaten other businesses.

For Microsoft, this is a big win that gives the company the ability to now bring Call of Duty to Microsoft’s popular Xbox gaming systems for its customers and in turn reap more revenue in the $175 billion global videogaming marketplace.

This has been quite a journey for Microsoft to get to this point; along the way it has had to satisfy global regulators from 16 different governments about the deal. But, country by country, Microsoft plowed through the red tape with an eye on getting the deal done and expanding its global video gaming assets and services. This move will bring more choice to the gaming market as Call of Duty players will be able to use more gaming systems to play their games of choice.

Good for Microsoft, says The Futurum Group. But there is still one potential issue Microsoft must resolve.

Microsoft Activision Deal: One Quick Caveat

Although the Microsoft deal for Activision is now officially sealed, the US Federal Trade Commission (FTC) still has an ongoing appeal in federal court which maintains its continuing opposition to the acquisition deal. The FTC appeal claims that the merger would not be good for US consumers and would harm other vendors in the marketplace as well. The Microsoft Activision deal was allowed to close after another FTC appeal failed to block the completion of the transaction.

With this remaining FTC appeal, which is scheduled to be heard in court on December 6, some sort of regulatory action from the agency could still follow, but at some point, the FTC is going to have to let the deal go through, as The Futurum Group thinks it should.

So, what was behind the FTC’s hesitation? The Futurum Group believes that part of the FTC’s hesitation is due to FTC Chair Lina Khan, who perhaps needs more time to look closely at the deal. The FTC and Khan probably want to make sure that they get a voice in this matter, because a lot of the reviews and headlines about the deal came from the UK’s Competition and Markets Authority (CMA), which gave its approval on October 13. Now maybe the FTC feels it can have the final say here.

In the scheme of things, the FTC’s hesitation and protective nature today is part of what The Futurum Group views as an anti-growth environment in which nobody wants to see big companies get bigger (at least not on the watch of an Administration that promised to take this position in these situations).

Despite this remaining appeal, though, Microsoft does not seem to view it as a big risk, a view that motivated the company to close the deal in the meantime. The Futurum Group believes that Microsoft will ultimately prevail in the remaining FTC appeal and that the process will move forward.

How the Microsoft Activision Deal Maintains Choice

The Futurum Group believes that even after this Microsoft Activision acquisition, consumer choice in the video gaming market will be maintained and even blossom. Among console sales, subscription services, mobile gaming, PC gaming, and the rest, there seems to be enough choice for everyone, without any infringement on the industry. And because Activision Blizzard publishes some of the most popular video games in gaming history, including Pitfall, Call of Duty, World of Warcraft, Overwatch, Candy Crush Saga, and Farm Heroes Saga, The Futurum Group sees this acquisition giving consumers more choice to play their favorite games on the gaming platforms they want to use. Further, as part of the acquisition, Microsoft agreed to continue to offer access to Call of Duty on gaming platforms from Nintendo and Sony, firming up that freedom of choice.

In an October 13 post on the Microsoft Xbox Wire web page, Phil Spencer, the CEO of Microsoft Gaming, wrote that the acquisition of Activision Blizzard by Microsoft will help drive more gaming innovation and options for game players.

“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,” wrote Spencer.

Microsoft Activision Deal: What It Means

Thus, after 20 months of legal wrangling, regulatory challenges, and agreements to make it happen, the Microsoft Activision acquisition has closed, marking the almost-end to this intriguing process which ultimately saw Microsoft grow its power in the gaming industry. The Futurum Group thinks that it ended well for all parties and that gamers will reap the most benefits from this deal, which will bring their favorite games to more hardware platforms.

In the video gaming industry, that may be the best news yet.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

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Author Information

Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.

From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.

A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.

An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.

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