Patcay.com – Microsoft’s video game brand, Xbox, successfully completed a $69 billion (IDR 1,084.22 trillion) acquisition of the gaming company, Activision Blizzard, last week, making it the largest business deal Microsoft has ever made in its 48-year history.
The transaction was finalized after the UK Competition and Markets Authority granted its approval on Friday (10/13/2023) local time. The announcement of the acquisition plan was initially made in January 2022.
This deal has provided Microsoft with a broad and robust portfolio of video game franchises, including names like Call of Duty, Crash Bandicoot, Diablo, Overwatch, StarCraft, Tony Hawk Pro Skater, and Warcraft.
Activision Blizzard reported revenues of $7.5 billion (IDR 117.85 trillion) in their latest fiscal year, while Microsoft recorded revenues of $212 billion (IDR 3.33125 trillion).
CEO of Activision Blizzard, Bobby Kotick, will continue to serve as CEO until the end of this year. Meanwhile, Microsoft’s CEO, Satya Nadella, who has held the position since 2014, aims to diversify the company’s business beyond its core areas like operating systems and productivity software.
Previously, Activision had been a partner and competitor to Microsoft. They were one of the major companies that released popular games with production costs reaching hundreds of millions of dollars.
The acquisition faced delays due to regulatory objections. When the deal was announced in January 2022, Microsoft hoped to complete the transaction by the end of June 2023. However, in July, both companies agreed to extend the deadline to October 18, 2023.
The U.S. Federal Trade Commission, the European Commission, and the UK Competition and Markets Authority all voiced concerns about the transaction.
Microsoft took actions to address European regulator concerns. They agreed to provide free licenses to consumers in the European Economic Area to stream their Activision Blizzard games and also provided free licenses to streaming service providers, allowing European gamers to play the games through the cloud.
Microsoft also made agreements with console rivals like Nintendo and Sony, granting them access to Call of Duty games for 10 years. Additionally, they struck similar deals with cloud-based game service providers like Boosteroid, Nvidia, Nware, and Ubitus.
In July, the U.S. Federal Trade Commission attempted to halt the Microsoft and Activision deal before obtaining full approval by filing a request with the federal district court in San Francisco. However, after five days of trial, the judge decided in favor of both companies. The FTC then brought the case to the U.S. Court of Appeals for the 9th Circuit, which rejected the request for a temporary halt to the acquisition.
To address concerns from UK officials, Microsoft announced in August that the game publisher Ubisoft would receive cloud streaming rights for Activision games for 15 years if the deal was approved.
Although the deal has been completed, the FTC expressed concerns on Friday that new aspects of the deal, such as the agreement with Ubisoft, could affect American consumers and would be evaluated as part of an ongoing administrative process. The FTC still believes that this deal could threaten business competition.