Ever since January of last year, there has been substantial commotion in the gaming community over Microsoft acquiring Activision Blizzard. Now, a year and a half later, the pending deal seems to be reaching completion and hence, it’s effects will soon be clear. Let’s take a closer look at this acquisition and its possible ramifications.
2022 – A Year of Acquisitions
Before proceeding, let’s understand what a business acquisition is with the following definition:
A business acquisition occurs when one company (the acquirer) buys most or all shares in another company (the target) to assume control of its assets and operations.
TheForage.com
Back on January 18th 2022, Microsoft revealed a $68.7 billion interest to acquire Activision Blizzard and its assets, including Activision, Blizzard Entertainment and King being moved under Xbox Game Studios. By inference, the following franchises and others would transfer ownership:
- Call of Duty
- Hearthstone
- Crash Bandicoot
- Spyro
- Warcraft
- StarCraft
- Diablo
- Overwatch
- Candy Crush
Undoubtedly, this is the largest acquisition ever in the gaming industry. If you’d like to know how this ranks compared to other acquisitions, here’s the top 5 according to a report by GamesRadar:
- Activision Blizzard –> King ($5.9 billion)
- Microsoft –> ZeniMax Media ($8.1 billion)
- Tencent –> Supercell ($8.6 billion)
- Take-Two Interactive –> Zynga ($12.7 billion)
- Microsoft –> Activision –> ($68.7 billion)
In addition, 2022 saw a number of other acquisitions in the gaming industry. In a report by Hitmaker, the following acquisitions are examples of how some of the biggest gaming companies got busy in 2022:
- Better Collective acquiring Futbin
- Savvy Gaming Group acquiring ESL and FACEIT
- Take-Two Interactive acquiring Zynga
- Infinite Reality acquiring ReKTGlobal
- Sony acquiring Bungie
- Embracer Group acquiring Crystal Dynamics, Eidos-Montreal & Square Enix Montreal
In this context, Microsft acquiring Blizzard came to light in a flurry of other transactions in the gaming industry in a uniquely busy year.
Microsoft Acquiring Activision Blizzard – The Effects
Once this transaction goes through, the following will take place:
- Microsoft would become the third-largest gaming company in the world (behind Tencent and Sony)
- Microsoft would become the largest headquartered gaming company in the Americas
- The most expensive video-game related acquisition to date
So, these statements are cool, but they don’t really effect the common consumer’s gaming experience. Focusing on this, here are some effects which will effect gamers:
- Microsoft will be able to offer Activision Blizzard games on Xbox Game Pass
- There have been discussions of reviving old Activision Blizzard franchises, such as Guitar Hero
- A new relationship between Activision Blizzard games and Microsoft consoles
It’s this last point which perhaps has Playstation worried the most. Mainstream titles such as Call of Duty, available on both Microsoft and Sony devices being restricted to one console could have devastating effects on the console wars. However, for a title such as Call of Duty, it seems that on 2022, a deal was signed to keep the title available on all consoles for at least another 10 years.
Moves like this have allowed the acquisition to go forward, with the legislative process being rather ardeous. Specifically, the deal has required permissions from multiple nations and international authorities.
October 18th 2023 – A Done Deal?
The current buzz at the time of writing revolves around the fact that Microsoft beat the FTC in a federal court on July 11th 2023.
For those unaware, the FTC is the Federal Trade Commision and is a body of the U.S Department of Justice which regulates such moves. Considering that Microsoft is headquartered in the U.S, getting the FTC’s approval is a must. Despite the FTC showing concern over the effect of Call of Duty in the market, console exclusivity and cloud gaming, the court ruling was that competition would not be substantially effected by the merger.
And just like that, amongst a number of other approvals granted by multiple countries and also structures such as the European Union, the acquisition looks to go ahead on the now extended deadline of 18th October. Of course, the date can move further should Activision and Microsoft arrange something between themselves.
So while this deal should technically not harm the gaming experience, it will definitely affect Activision Blizzard games in one way or another. Only time will tell and help us understand the exact ramifications of this massive acquisition on the future of the video game industry and other related industries also.
Let us know your thoughts in the comments section below!
References:
- TheForage – https://www.theforage.com/blog/skills/acquisition#:~:text=A%20business%20acquisition%20occurs%20when,the%20terms%20of%20the%20transaction.
- Hitmaker – https://hitmarker.net/news/video-game-industry-acquisition-2022-894578
- GamesRadar – https://www.gamesradar.com/biggest-most-expensive-video-game-acquisitions/
