In what ranks as the biggest deal ever in the world of gaming, Microsoft Corp.‘s $69 billion acquisition of Activision Blizzard Inc. looks like it may just happen. Despite numerous obstacles, including a challenging year and a half in the face of global regulators skeptical over the dominating market power of the unified company, the juggernaut appears to be moving forward [1].
The opposition from the Federal Trade Commission (FTC) has been one of the biggest impediments, alleging that the merger would stifle competition in the densely lucrative online gaming market. The FTC’s argument is that Microsoft could wield undue advantage over its competitors by integrating its Xbox console-making capabilities with Activision’s vast array of popular gaming titles [1].
In a bid to alleviate antitrust concerns, Microsoft pledged to maintain Activision’s massively popular game ‘Call of Duty’ across pro rival Sony Corp.’s PlayStation console. With the FTC’s still ongoing challenge against the deal, the takeover’s fate remains uncertain [1].
UK’s Competition and Markets Authority (CMA) voiced similar concerns to those of the FTC before backing the deal, given concessions from Microsoft and Activision. When the deal was initially vetoed, many conjectured it could lead to decreased innovation, less choice, and increased prices for UK gamers [1].
In an interesting turn of events, after a US judge’s ruling and the delay in litigation, Microsoft and Activision agreed to lesser control over their cloud gaming business as a peace offering to appease the UK regulators. This lead to the CMA giving its formal approval on October 13[1].
This Microsoft and Activision’s repositioned deal still pose a serious risk of eliciting additional scrutiny from the European Union regulators. As Microsoft and Activision have expressed confidence that the takeover will happen ultimately, the legal fraternity and gaming world remain tuned in for the next twist in this tale.[1]