Microsoft-Activision Blizzard $69 Billion Deal Closes as UK CMA Gives Approval

14.10.2023 - 12:15 / gadgets.ndtv.com / Phil Spencer / Bobby Kotick / Michael Pachter / Sony

Xbox maker Microsoft closed its $69 billion (nearly Rs. 5,75,620 crore) deal for Activision Blizzard on Friday, swelling its heft in the video-gaming market with best-selling titles including Call of Duty to better compete with industry leader Sony.

Originally unveiled in January 2022, the biggest deal in the gaming industry cleared its final big hurdle — an approval from Britain — earlier in the day after Microsoft agreed to sell streaming rights for Activision's games to allay competition concerns.

The completion is a major win for the US tech firm in its push to attract more people to its Xbox consoles and Game Pass subscription service. Microsoft's gaming revenue trails that of Sony, whose PlayStation consoles outsell the Xbox.

"Today is a good day to play," Microsoft Gaming CEO Phil Spencer said in a post on the X social media platform, formerly known as Twitter. He will oversee the Activision business, with the video-game publisher's CEO Bobby Kotick staying on until end-2023.

Spencer has touted the purchase as a way for Microsoft to break into the more than $90-billion (nearly Rs. 7,50,800 crore) market for mobile games.

Activision makes popular mobile titles including Candy Crush Saga and Call of Duty Mobile — games that were excluded from the cloud streaming deal Microsoft signed with France's Ubisoft Entertainment to secure approval from Britain.

"Microsoft instantly has more than $3 billion (nearly Rs. 25,000 crore) of mobile revenues," said Wedbush Securities analyst Michael Pachter.

"The big benefit is that Microsoft has a vision that they are going to deliver games through a subscription, and they need more content to give subscribers. So, this is a big step toward having sufficient content," he said. 

Regulatory hurdles

The deal still faces opposition from the US Federal Trade Commission, which failed in its previous attempt to block the purchase. The FTC said on Friday it was focused on its appeal, but would "assess" Microsoft's agreement with Ubisoft.

But analysts believe that will change little. "The impact of an FTC challenge will be limited to incremental concessions in the future," DA Davidson analyst Gil Luria said.

The main hurdle came from Britain's Competition and Markets Authority, which had originally blocked the deal in April over concerns it could give the US tech giant a stranglehold on the nascent cloud gaming market.

The deal was the biggest test of the CMA's global power to take on the tech giants since Britain left the European Union.

The regulator said on Friday "sticking to its guns" in the face of criticism from the merging companies had delivered an outcome that was better for competition, consumers and economic growth. 

Microsoft's concession on streaming was a