Microsoft had to go through a blizzard of regulation, but it is now the proud owner of a world leader in video games.
What happened: After nearly two years and multiple regulatory challenges, Microsoft closed its US$75 billion acquisition of gaming company Activision Blizzard — maker of hit games like Call of Duty and Candy Crush — after British regulators gave the deal a final go-ahead.
- Activision’s catalogue is set to more than double the value of Microsoft’s gaming biz, boosting its Xbox Game Pass service and its nascent cloud gaming operations.
Catch-up: The deal survived a melee of regulation, with challenges coming from the US Federal Trade Commission (FTC), European Commission, and UK Competition and Markets Authority (CMA). Like a skilled gamer, Microsoft emerged victorious from each boss battle.
- In the EU and UK, Microsoft allayed competition concerns by signing deals with competitors to provide access, licensing, and streaming rights to Activision titles.
- This strategy didn’t please the FTC, which took Microsoft to federal court. Once there, the company convinced the ruling judge that the deal should go through.
Why it matters: Microsoft faced pushback from the three most powerful regulators but still got the deal done — a sign that global attempts to rein in Big Tech’s biggest and curb their ability to swallow other companies whole have not worked so far, per The New York Times.
- What’s more, Microsoft’s careful strategy of inking deals with rivals and using its vast resources to wait out long legal battles could be a blueprint other tech giants follow.
What’s next: The FTC may have lost the battle, but it’s still fighting the war. It appealed the federal court ruling and will now try to unwind the deal, a process that could take years.—QH
