UK regulators provisionally approves Microsoft acquiring Activision Blizzard

27 Sep

Ganesh Jadhav

Last year, Microsoft expressed its interest in acquiring Activision Blizzard. Back in January 2022, the tech-giant made a lucrative offer of $69Bn in cash to acquire the company . If this deal goes through, it will be the most influential and the largest acquisition in gaming history.

What is Activision Blizzard?

Activision Blizzard is an American video game holding company formed in 2008 after a merger between Activision Inc. and Vivendi Games. The company currently has three major divisions namely; Activision publishing, Blizzard Entertainment, and mobile gaming publishing and distribution division; King.

The company holds multiple major gaming IPs including Call of Duty, World of Warcraft, Starcraft, Overwatch, Diablo, Crash Bandicoot, Tony Hawk series and Candy Crush Saga. Additionally, esports IP The Call of Duty League(CDL), Overwatch League(OWL), and Major League Gaming(MLG) fall under Activision Blizzard.

Why does Activision Blizzard want to sell?

While there might be multiple reasons, one of the biggest contributing factors to the decision is likely the exponential growth of the company during the pandemic. With multiple top tier and successful IPs, Activision Blizzard has trouble committing resources to all of them. The company has already been under a lot of fire for mistreating their employees and the toxic working conditions are leading to a brain drain.

Additionally, the esports leagues CDL and OWL are in bad shape. Both the leagues are facing troubles monetizing their content and retaining the community. This is evident with the OWL, who have been in talks with third party tournament organizations in order to keep the league alive. The situation is no different for CDL either.

In such dire situations, continually developing and distributing games and maintaining the high standards has been a struggle for Activision Blizzard. Hence, the option of selling to a bigger company being the smarter choice.

Microsoft makes an offer:

After Activision Blizzard made their intentions clear, Microsoft made an offer of $68.7Bn all-cash transaction for acquiring the company back in January 2022. This includes Major League Gaming, an esports subsidiary of Activision Blizzard. Both parties have agreed on the acquisition terms and only regulatory approval is pending for the deal to succeed.

With Microsoft as the parent company, Bobby Kotick will continue to serve as Activision Blizzard’s CEO. Microsoft will likely provide them with the additional resources and integrate their multiple IPs with Xbox Cloud gaming.

Talking about the acquisition, Bobby Kotick, CEO of Activision Blizzard said:

“For more than 30 years our incredibly talented teams have created some of the most successful games. The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”

This was back in 2022, but it has been a year since. Moreover, the previous deadline for merger completion of July 18th was extended to October 18th in order to close out some regulatory issues.

What’s the reason behind the regulatory issues?

A big reason for anyone to oppose the acquisition is the simple fact that with Microsoft acquiring Activision Blizzard, they'd become one of the biggest players in the gaming industry. Microsoft already controls multiple subsidiaries including ZeniMax Media.

Some of the most notable games under Microsoft include Minecraft, Halo, the Elder Scrolls series, Doom Series, Forza Motorsports and Forza Horizon series with the Microsoft studio, Xbox studio games. Along with the newly acquired Activision Blizzard games namely Call of Duty, Starcraft, World of Warcraft, Hearthstone, Diablo, Overwatch, Sekiro, Crash Bandicoot, Candy Crush Saga etc., Microsoft will be a parent to some of the most successful games in the history of gaming.

With Microsoft controlling some of the biggest titles in gaming, they might be in a strong position to monopolize the gaming market. This will hurt the competition thus multiple countries and regulators have been investigating the acquisition.

Update on the Microsoft acquiring Activision Blizzard and what does it mean for gaming?

As of today, 26th September, the deal is on the verge of completion. On 22nd September, the UK regulator has provisionally approved the deal. Multiple other major countries and regulators have already gave the deal a green flag and as it stands, the deal is almost successful. With the deadline for the acquisition imminent and we will get the news on the deal soon.

With Microsoft as a parent, multiple esports IPs of Activision Blizzard might be revived. This includes OWL, CDL and MLG. The acquisition also provides Microsoft with an opportunity to step into Esports. Microsoft can actively investigate and invest into the esports ventures, opening a door of possibility for Microsoft.

Additionally, this adds a possibility of adding multitude of new titles to the already successful Xbox Game Pass. The game pass already offers an amazing collection of games for a subscription fee. With new games, Microsoft can improve the game pass, add levels and include even more games. The monetization possibilities of the acquisition are limitless for Microsoft.

There will be more information on what Microsoft has in store for Activision Blizzard, once the deal is finalized. The deal is already in the last stages, and with the deadline fast approaching, we are sure to get more news soon.

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