The 57 Billion Pound Game Changer Merger has Finally Come to a Close.
By: Samer Fakhri
Microsoft has finally completed the Activision-blizzard acquisition at a cost of 57 billion GBP on the 13th of October 2023. Now meaning that massive IP’s such as Overwatch, Call of Duty and Diablo are now going to be a part of Microsoft's gaming studio after 20 months of battling regulators in both the US and the UK. Microsoft had successfully won over the Federal Trade Commission in the US federal court and successfully appeased the Competition and Markets Authority (CMA) in the UK a few days ago.
Phil Spencer, Xbox’s chief said “Today is a good day to play. We officially welcome Activision Blizzard King to Team Xbox.”
However, this Acquisition has come with a few restrictions imposed by the CMA, especially in regarding cloud gaming and exclusivity rights to pc and console games. Microsoft is planning on adding a lot of these new IP’s into their Xbox Game Pass, but games such as Modern Warfare and Diablo IV will not be coming to the Game Pass this year.
Challenges for the Acquisition:
One of the biggest challenges Microsoft has had to face is the concerns the CMA had over Microsoft's dominance in the cloud gaming industry if they had the rights to stream Activision-blizzard IP’s exclusively on their cloud platform.
Instead the CMA wanted to push for preserving competitive prices and the opportunity for other game companies to develop better services. Microsoft's solution to this was to pass the rights of streaming Blizzard-Activision IP’s on to Ubisoft as the CMA can enforce its terms better without concern.
This means that World of Warcraft, Call of Duty and Overwatch won’t be featured on Xbox’s cloud gaming service but rather on Ubisoft+ cloud gaming.
However, the FTC wants to continue to appeal the merger as “Microsoft and Activision’s new agreement with Ubisoft creates a whole new facet to the acquisition that will affect American consumers.” Spokesperson Victoria Graham stated, to the Reuters and that the “FTC continues to believe this deal is a threat to competition”
Microsoft will be turning into a publishing powerhouse through this acquisition due to them gaining more than 8.500 Activision employees and will be adding more than nine different game studios to its Xbox Game Studios portfolio.
Microsoft through this merger has stated that they will “stay affirm to their labor principles and innovative approach to union partnerships for both current and new employees regardless of whatever choice they make about their workplace or their representatives” as said by Brad Smith, Microsoft’s Vice Chair and President.
This is all to uphold Microsoft’s neutrality agreement it struck with the Communications Workers of America (CWA) back in June 2022, 16 months before the finalisation of the merger.
This merger resulted in Activision Blizzard’s CEO Bobby Kotick to step down from his position in December after being in power for 32 years. While his last few years have been met with scandals, including allegations of a toxic work environment.
Bobby Koltick has stated in an email to Activision Blizzard employees that “I have long said that I am fully committed to helping with the transition” and that “Phill and I both look forward to working together on a smoother integration for our teams and players”.
