Activision Blizzard is a video game maker that owns popular titles including the Call of Duty and Candy Crush franchises. File
After months of regulatory delay, Microsoft has finally closed its $69 billion (R1.3 trillion) deal to buy Activision Blizzard, a video game maker that owns popular titles including the Call of Duty and Candy Crush franchises.
Antitrust agencies in the US and Britain sought to kill the deal, saying it would give Xbox owner Microsoft an unfair advantage in the gaming industry and contribute to anticompetitive consolidation in the tech industry.
But Microsoft, which sought to create a friendly image in court and through lobbying in Washington, ultimately prevailed. The deal, which officially closed Friday after UK. regulators gave the green light, is the largest ever in the 48-year history of Microsoft. It also dwarfs Amazon's acquisition of Whole Foods, which cost $13bn, Salesforce's purchase of Slack for $28bn and even Microsoft's own purchase of LinkedIn, for which it paid $26bn.
UK antitrust authorities said Friday that they approved the deal only because Microsoft sold the Activision cloud streaming rights to French company Ubisoft, mitigating the risk of a "stranglehold" over the market.
Phil Spencer, the CEO of Microsoft Gaming, praised Activision Blizzard in a statement as the company behind "some of the most played and most beloved franchises in gaming history".
The deal is a blow to US antitrust regulators who had targeted the acquisition as part of a broader strategy to rein in the growing power of the tech industry. Under the leadership of Biden appointee Lina Khan, the Federal Trade Commission has aggressively gone after tech companies including Meta, Twitter and Amazon, focusing on issues including acquisitions, consumer privacy and misleading customers. (Amazon founder Jeff Bezos owns The Washington Post. Interim Post CEO Patty Stonesifer sits on Amazon's board.)
Some of those actions have resulted in settlements in the tens of millions of dollars. But a string of losses in court - where the FTC also did not block Meta from buying the augmented-reality start-up Within - could undercut Khan's reputation as an effective antitrust figure. Republican legislators grilled Khan in a marathon hearing in July, some arguing that she is wasting taxpayer money on hopeless litigation.
Microsoft's success could embolden other tech companies to move forward with acquisitions that also could attract opposition from the FTC. The Biden administration and Khan's tough rhetoric about antitrust have created uncertainty in Silicon Valley, but the closure of the deal underscores the limits of the administration's aggressive approach.
The acquisition also is a setback for gaming competitors including Sony, the maker of the PlayStation.
For decades, Microsoft has been best known as a purveyor of personal computers and office software. It also has become a juggernaut of the cloud computing industry. But in recent years, the company has pursued an ambitious acquisition strategy, buying companies including the coding repository GitHub and the professional networking platform LinkedIn as it seeks to gain footholds in new tech territories. It also invested $1bn in ChatGPT maker OpenAI in 2019, a prescient move that gave the company a significant advantage in the generative AI race.
Microsoft created the Xbox more than 20 years ago. By buying Activision, which itself acquired the successful game makers Blizzard and King, the tech giant gains access to highly popular games that will help the company continue its expansion into gaming - on its consoles and in the cloud.
Some of Activision's staffers voted last year to unionise with the Communications Workers of America. The company has been accused of union busting by its workers in the past; Microsoft has said it will respect gaming workers' right to unionise.
Microsoft faced scrutiny from countries around the globe over the acquisition of Activision, testing the company's longtime president, Brad Smith. Smith went on a global charm offensive to convince regulators around the world that the Activision deal would give consumers more gaming options. The company sought to make concessions to wary antitrust regulators internationally.
The European Union, which has traditionally taken an aggressive posture against consolidation among American tech companies, approved the deal after Microsoft committed to license popular Activision games franchises - including Call of Duty and World of Warcraft - free to other cloud streaming providers.
The FTC argued that buying Activision would allow Microsoft to limit consumers to playing popular games only on Microsoft-owned platforms such as the Xbox. In court, Microsoft CEO Satya Nadella repeatedly said the company had no such intentions and instead planned to make the popular games as widely available as possible, including on rival consoles PlayStation and Nintendo Switch.
THE WASHINGTON POST
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