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Microsoft has successfully acquired Activision Blizzard for $69B, marking the largest deal in video game history. This acquisition has propelled Microsoft from fifth to third place in the global gaming industry, trailing only after Tencent Holdings and Sony Group.

  • A two-year regulatory battle: The deal faced a lengthy two-year battle with global regulators. The process was so complex that Microsoft had to negotiate an extra three months to close the deal due to antitrust objections.
  • Approval from UK authorities: Despite these challenges, Microsoft managed to tweak its merger agreement, gaining approval from UK’s Competition and Markets Authority. The US Federal Trade Commission, however, is still in legal proceedings, scrutinizing the deal.
  • Restructuring involving Ubisoft Entertainment: As part of the deal, a restructuring plan involving French gaming company, Ubisoft Entertainment, was executed.
  • Boost for mobile games business: Phil Spencer, Microsoft’s gaming chief, now shoulders the responsibility of integrating new titles and expanding Microsoft’s mobile games venture. The popular game, Candy Crush, could be a significant asset, but hurdles may arise with the Apple App Store and the saturated mobile gaming market.
  • Embarking on Activision’s Reform: Microsoft is now set to initiate changes in Activision Blizzard’s culture following a delay in the acquisition. Despite traditionally adopting a hands-off approach towards its acquired gaming studios, Microsoft may adopt a more hands-on stance this time.
  • Addressing Fan Complaints: Fans have expressed dissatisfaction towards Activision’s practice of oversaturating the market with releases like Tony Hawk’s Pro Skater and Guitar Hero, resulting in the dilution of these franchises. The perceived neglect of the StarCraft series, despite its popularity, due to its lower profitability has also drawn ire.
  • Handling of harassment complaints at Activision: Microsoft has reassured neutrality regarding employee unionization and a commitment to diversity, equity, and inclusion, amidst criticism towards Activision’s CEO Bobby Kotick‘s handling of harassment complaints.
  • CEO’s Tenure: Kotick is set to remain Activision’s CEO until the end of this year, reporting directly to Phil Spencer under the new arrangement.

Initially, UK regulators had rejected the deal due to fears of increased prices, fewer options, and stifled innovation for gamers. However, the new agreement ensures Microsoft doesn’t restrict access to Activision’s key content to its own gaming service or withhold those games from competitors.

Founded in 1979, Activision Blizzard boasts some of the world’s most popular game franchises including Overwatch, World of Warcraft, Crash Bandicoot, and Call of Duty, the latter having sold over 425 million units and generated more than $30B in revenue prior to its latest installment.

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