Microsoft completes its $69 billion acquisition of Call of Duty maker Activision Blizzard

Microsoft completes its $69 billion acquisition of Call of Duty maker Activision Blizzard
Peter Morgan/AP

In the biggest deal in gaming history, Microsoft has completed its $69 billion (£56 billion) acquisition of Activision Blizzard, the company that makes Call of Duty.

It happened at the same time that Microsoft, the maker of the Xbox gaming system, received approval from UK regulators for the global acquisition.

Activision’s security, according to Microsoft’s Phil Spencer, was “incredible”.

Activision Blizzard CEO Bobby Kotick indicated in a letter to colleagues that he would retire at the conclusion of 2023 after the announcement of the merger.

“I have long said that I am fully committed to helping with the transition,” he stated. “[Phil Spencer and I] both look forward to working together on a smooth integration for our teams and players.”

Mr. Spencer, the CEO of Microsoft Gaming, tried to reassure players despite worries from rivals like Sony, the developer of the PlayStation, and regulators about competition in the gaming business.

“Whether you play on Xbox, PlayStation, Nintendo, PC, or mobile, you are welcome here – and will remain welcome, even if Xbox isn’t where you play your favorite franchise,” Mr. Spencer said in a statement following the takeover.

Because we all benefit when everyone participates. We think that today’s news will open up a world of opportunities for more games to be played.

Preservation prices

In accordance with the revised agreement, Microsoft has given French video game developer Ubisoft the ability to distribute Activision’s titles on consoles and PCs via the cloud.

Microsoft will now have control over games like Call of Duty, World of Warcraft, and Candy Crush, which will provide the company with enormous earnings, despite the concession.

However, although accepting the acquisition, the watchdog criticized Microsoft’s actions during the close to two-year conflict.

CEO Sarah Cardell stated that businesses and their advisors should be in no doubt that the tactics taken by Microsoft are no way to deal with the CMA.

Microsoft had the ability to restructure during our initial study but chose to steadfastly cling to a set of tactics that we informed them would be ineffective. Such a drag-out of the process is a waste of time and resources.

Microsoft’s big deal – what you need to know

Microsoft’s president Brad Smith criticized the CMA’s decision, saying it was “bad for Britain” and went against “the ambitions of the UK to become an attractive country to build technology businesses” after the competition agency vetoed the acquisition earlier this year.

Regulators throughout the world have had mixed reactions to it and have found it to be contentious, but those in the European Union have already approved it. Recently, the courts rejected the US competition watchdog’s request to halt the transaction.

The Assassin’s Creed developer Ubisoft purchased Activision’s cloud streaming rights, and according to Ms. Cardell of the CMA, “we’ve ensured Microsoft can’t have a stranglehold over this important and rapidly developing market.”

“We were clear that that deal couldn’t go ahead, because it would have harmed competition, and that would have been bad for UK gamers,” she stated.

“We take our decisions free from political influence and we won’t be swayed by corporate lobbying.”

Final barrier cleared

Microsoft was “grateful for the CMA’s thorough review and decision,” according to Mr. Smith.

Activision’s departing CEO, Mr. Kotick, is expected to receive a $400 million salary based on the shares he owns, while Activision chairman Brian Kelly is expected to receive a $100 million salary. Microsoft is purchasing Activision outright at a premium price of $95 per share.

Microsoft has agreed to give Ubisoft the license to stream Activision games from the cloud for 15 years outside of the European Economic Area (EEA) as part of the revised arrangement. Along with the EU nations, Iceland, Liechtenstein, and Norway are included in this.

Ubisoft will no longer own the cloud gaming rights for Activision’s content when the 15 years are up, but it is understood the regulator hopes the period will see rivals establish themselves and make the cloud gaming industry more competitive.

Microsoft is hoping that the acquisition would increase demand for its Xbox system and allow the tech company to add additional games to its Xbox Game Pass service, which charges subscribers a monthly fee to access a library of games that can be downloaded or streamed from the cloud.

The partnership with Activision also means that Microsoft will be the sole owner of its mobile game development division, which it plans to use to build on the popularity of games like Candy Crush.

The acquisition might propel Microsoft beyond Nintendo and place it behind market leader Tencent and Sony, the maker of the PlayStation console, as the third-largest player in the video game business.

Concerned that popular Activision games like Call of Duty would eventually become Xbox exclusives, Sony vehemently opposed this agreement.

Although Sony is not opposed to buying up popular studios, the PlayStation now outsells Microsoft’s Xbox. However, like all entertainment platforms, the key to success is access to the finest content.

More options

The approval of the takeover, according to consultant and former commercial director of cloud services provider UK Cloud Nicky Stewart, is “great news for gamers.”

“[It will] lead to] more choice, more innovation, better value, improved gaming experiences, and a healthy, competitive market,” said Ms. Stewart, who is also a former head of ICT at the Cabinet Office government agency.

Microsoft was compelled to make UK concessions by the CMA that were not required by other agencies. This is encouraging for the fledgling gaming sector in the UK.

Credits: BBC

Read more at News Intercept

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