In what is considered the biggest acquisition in the video game industry, Microsoft has completed the acquisition of Activision Blizzard. It is also Microsoft’s biggest deal yet. The deal will now see the Xbox maker firmly in control of popular franchises like Diablo, Warcraft, and Call of Duty.
The $68.7 billion deal will see a plethora of developers join Xbox Game Studios. This includes Sledgehammer Games, Raven Software, Toys for Bob, Infinity Ward, High Moon Studios, and mobile game maker, King.
“As one team, we’ll learn, innovate, and continue to deliver on our promise to bring the joy and community of gaming to more people,” said Phil Spencer, Microsoft’s head of gaming. “We’ll do this in a culture that strives to empower everyone to do their best work, where all people are welcome, and is centered on our ongoing commitment of Gaming for Everyone.”
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Microsoft’s bid to acquire Activision was a rocky process that involved a lengthy legal battle, especially in the United States. The legal hearings even led to interesting behind-the-scene revelations that gamers were not usually privy to, thanks to a poorly redacted document.
“Together we’ll create new worlds and stories, bring your favorite games to more places so more players can join in, and we’ll engage with and delight players in new, innovative ways in the places they love to play including mobile, cloud streaming, and more,” Spencer said.
Microsoft adjusted the deal to appease the UK’s Competition and Markets Authority
The Competition and Markets Authority (CMA) was one of the regulatory bodies that opposed the monumental acquisition. In April, the CMA blocked the deal on the grounds that it would give Microsoft an unfair competitive advantage in the cloud gaming market.
After back and forth, the Xbox maker agreed to issue Ubisoft cloud gaming rights outside the European Economic Area for all Activision Blizard games over the next 15 years. The CMA may have achieved more in forcing Microsoft to adjust the deal than the U.S. regulatory body.
After a long legal battle, the U.S. Federal Trade Commission (FTC) achieved nothing. In September, the CMA provisionally agreed to let the deal go on. However, after a consultation period, it cleared the deal to go on today.
“The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers,” read the CMA statement. “It will allow Ubisoft to offer Activision’s content under any business model, including through multigame subscription services. It will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.”
Apparently, the CMA’s opposition was the only obstacle on the path of the acquisition. Once it was out of the way, the rest of the deal fast-tracked to completion. One of those who responded to CMA’s decision to clear the deal was Brad Smith, Microsoft’s president.
“We’re grateful for the CMA’s thorough review and decision today,” Smith said. “We have now crossed the final regulatory hurdle to close this acquisition, which we believe will benefit players and the gaming industry worldwide.”
With the acquisition of Activision, here is the long list of all the franchises that now belong to Microsoft:
- Blackthorne
- Candy Crush
- Crash Bandicoot
- Diablo
- Freddy Pharkas Frontier Pharmacist
- Gabriel Knight
- Guitar Hero
- Hearthstone
- Hexen
- Interstate 76
- King’s Quest
- Overwatch
- Phantasmagoria
- Pitfall
- Prototype
- Quest for Glory
- Skylanders
- Space Quest
- Spyro the Dragon
- StarCraft
- Tenchu
- The Lost Vikings
- Tony Hawk Pro Skater
- True Crime
- WarCraft
- Zork – Call of Duty
The acquisition may well be the easy part
While it is OK for all the teams entangled in this regulatory brawl to heave a sigh of relief, they may well discover that everything they have been through may be the easy part. The hard part is what lies ahead. Microsoft and Activision must now come together to clearly define their strategy for transforming the video game industry.
“Today we start the work to bring beloved Activision, Blizzard, and King franchises to Game Pass and other platforms,” Spenser said. “We’ll share more about when you can expect to play in the coming months.”
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Hitherto, Microsoft has the culture of allowing a studio to run independently after acquisition. Activision Blizzard will now become Microsoft’s third publishing firm besides Bethesda and Xbox.
The cost of making video games is growing while sales remain unpredictable. Many will wonder if the Xbox maker will change its “limited integration strategy” to support the new studios now under its umbrella.
Outside of the statements of excitement, it will also be interesting to see how the acquisition will help the Xbox maker stamp a stronger foot in the mobile gaming space. Most importantly, will this acquisition help them to outsell their closest rival, PlayStation? Surely, interesting years lie ahead.
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