Microsoft completed the acquisition of video game maker Activision Blizzard for $69 billion. This is one of the most expensive technology acquisitions in history and may have an impact on the entire video game industry.
The notice that the deal had been completed came seven hours after Microsoft received final approval from the UK competition regulator, which reversed its earlier decision Blocking $69 billion in gambling transactionsremoving the final hurdle to the transaction.
Taking over the studio behind popular games such as Call of Duty, Diablo and Stand Up will boost Microsoft’s Xbox console, which ranks third in sales behind PlayStation and Nintendo. The software giant also has bigger ambitions to include Activision games in its multi-game subscription service, which would operate like a Netflix for video games.
It took nearly 22 months to complete the deal, reflecting concerns among rivals and government regulators that Microsoft could use its growing collection of games to reduce competition.This is part of wider industry consolidation some independent game developers They worry they will be marginalized as the industry allocates resources to blockbuster franchises with a history of past success.
It is expected to be followed by the blessing of the UK Competition and Markets Authority give preliminary approval Last month, Microsoft introduced a revised proposal aimed at addressing concerns that the deal would harm competition and hurt gamers, particularly in the emerging cloud gaming market, by allowing players to avoid buying expensive consoles and Stream games to your tablet or phone.
The regulator said: “As the cloud gaming market takes off, the new agreement will prevent Microsoft from locking out competition in the cloud gaming sector, thereby retaining competitive prices and services for UK cloud gaming customers.”
Microsoft’s response to “Thorough review President Brad Smith said the “decision to partner” will “benefit players and the gaming industry around the world.”
Activision CEO Bobby Kotick said the game maker is looking forward to “becoming a part of the Xbox team.”
Josh Chapman, managing partner of Konvoy, a venture capital firm that invests in video game startups, said the deal will benefit gamers and “have a positive impact on the entire gaming industry.”
However, it also tilts the “balance of power significantly” in favor of Microsoft, whose Xbox gaming console lags behind Sony’s, said George Jijiashvili, senior principal analyst at technology research and advisory firm Omdia. PlayStation and Nintendo.
Microsoft’s new power
He said that Microsoft “now has a huge opportunity to determine the future of the gaming industry.”
Since announcing the deal in January 2022, Microsoft has received approval from antitrust authorities covering more than 40 countries.Crucially, it gained Liked by 27 EU countries After agreeing to allow users and cloud gaming platforms to stream its games without paying royalties for 10 years.
But the deal faced resistance from UK and US regulators Worried it will stifle competition in the video game industry. Archrival Sony is also concerned that it will restrict PlayStation players from playing games in its long-running military shooter Call of Duty series.
Federal Trade Commission lost court bid put the deal on hold to allow its in-house judges to review it. Not giving up, the FTC appealed the decision and last month filed a notice of plans to resume the trial. That suggests U.S. regulators intend to cancel the deal once it closes.
Meanwhile, UK regulators are the last major obstacle to the deal going ahead. To win approval, Microsoft will sell cloud streaming rights to all current and new Activision games outside the European Union and three other European countries to French game studio Ubisoft Entertainment.
British regulators initially blocked the deal over concerns that Microsoft could block Activision Blizzard from entering the cloud gaming market. Then, in an unprecedented move, UK regulator says it needs to reconsider.
One factor was EU approval, which came after Microsoft promised to automatically license Activision games to cloud gaming platforms for free.According to court documents, another “significant change in circumstances” was Microsoft signs deal with Sony Keep Call of Duty running on PlayStation for at least 10 years.
But regulators still criticized the way the deal was struck and warned other companies not to use “the tactics used by Microsoft.”
Sarah Cardell, the regulator’s chief executive, said in a statement: “During our initial investigation, Microsoft was given the opportunity to reorganize, but instead we continued to insist on a series of measures that we told them were fundamentally inappropriate. It won’t work.” “Delaying the proceedings in this way will only waste time and money.”
Max von Thun, a proponent of stronger antitrust enforcement and director of the Open Markets Institute’s European office, said UK regulators “imposed structural remedies against Microsoft that were significantly stronger than the weak ones accepted by the European Commission” Commitment is worthy of praise.” .
But he said the CMA’s inconsistency made the UK regulator appear “weak and indecisive”.
“Looking ahead, there is now a serious risk that merging companies and their advisers will no longer take no for an answer when dealing with the CMA,” von Thurn said.
___
AP Technology Writer Matt O’Brien contributed from Providence, Rhode Island.
Svlook
