In a monumental move for the gaming industry, Microsoft has completed its $68.7 billion acquisition of Activision Blizzard, a renowned publisher responsible for blockbuster titles like Call of Duty, World of Warcraft, and Diablo. This long-anticipated merger has culminated after a rigorous 20-month journey filled with regulatory challenges both in the UK and the US. Microsoft’s tenacity prevailed, ultimately defeating the Federal Trade Commission (FTC) in a US federal court and reshaping the deal to satisfy the UK’s Competition and Markets Authority (CMA).
As the ink dries on this historic deal, the gaming world braces for significant changes. Phil Spencer, the head of Xbox, expressed his enthusiasm, saying, “We love gaming. We play games, create games, and know first-hand how much gaming means to all of us as individuals and collectively, as a community. And today, we officially welcome Activision Blizzard and their teams to Xbox.” Spencer emphasizes that this united front will foster innovation, uphold inclusivity, and continue delivering the joy of gaming to a broader audience.
This acquisition marks a watershed moment for Microsoft, representing the company’s largest-ever investment. It dwarfs previous acquisitions, such as the $26 billion purchase of LinkedIn in 2016 and the $7.5 billion acquisition of Bethesda in 2021. Beyond the financial aspect, this move signifies Microsoft’s formidable foray into the gaming realm. The company’s original announcement regarding this mega-deal positioned it as the “third-largest gaming company by revenue, behind Tencent and Sony.”
Microsoft’s vision extends beyond a mere takeover; it is committed to bringing Activision Blizzard’s game portfolio to Xbox Game Pass, further enriching the platform. Spencer asserts, “Today we start the work to bring beloved Activision, Blizzard, and King franchises to Game Pass and other platforms.” While eager gamers await these additions, the company is poised to unveil further details about the timeline for these releases in the coming months.
However, it’s worth noting that earlier this week, Activision Blizzard clarified that titles like Modern Warfare 3 and Diablo IV won’t be joining Xbox Game Pass this year. Microsoft has yet to provide an update on Xbox Game Pass subscription numbers, with the last announcement citing 25 million subscribers when the Activision Blizzard acquisition was first revealed in January 2022.
This acquisition not only bolsters Microsoft’s gaming portfolio but also significantly expands its stable of game studios. The Blizzard side alone contributes more than nine game studios to Xbox Game Studios, while the acquisition encompasses gaming studios located in over 11 different locations, amplifying Microsoft’s presence in the mobile gaming arena. With the addition of more than 8,500 Activision employees to its ranks, Microsoft has become a powerhouse in the realm of game publishing.
Bobby Kotick, the CEO of Activision Blizzard, will remain in his role to facilitate a seamless transition until the conclusion of 2023. Kotick expressed his commitment, stating, “I have long said that I am fully committed to helping with the transition.” He disclosed that Phil Spencer had asked him to continue as CEO of ABK, reporting directly to him, and they have agreed to this arrangement until the end of 2023. Together, they look forward to ensuring a smooth integration for their teams and players.
This acquisition journey has been far from straightforward for Microsoft. The CMA initially blocked the deal in the UK due to concerns related to cloud gaming. This obstacle came after the FTC’s initial lawsuit aimed at halting the Activision Blizzard acquisition in the US. Following the FTC’s failure to secure a preliminary injunction against Microsoft, both the CMA and Microsoft chose to pause their legal battles and eventually reached an agreement regarding cloud gaming rights, ultimately paving the way for this historic merger to become a reality.