Microsoft Successfully Concludes Acquisition of Activision Blizzard in Record-Breaking Deal

Microsoft has officially completed its acquisition of the video game industry giant, Activision Blizzard, this monumental transaction, marking the largest in Microsoft’s 48-year history, has now been finalized, overcoming regulatory challenges, including a favorable ruling from the U.S. district court.

This acquisition offers Microsoft access to a vast array of video game assets, including the popular title “Call of Duty.” Activision Blizzard, the game developer, recorded revenues of $7.5 billion in its most recent fiscal year, a fraction of Microsoft’s $212 billion in total revenue.

The United Kingdom’s Competition and Markets Authority provided the green light for the deal, following its preliminary approval last month, Satya Nadella, Microsoft’s CEO, is actively working to diversify the company’s revenue sources beyond its core areas of operating systems and software.

Notably, Microsoft made concessions to European regulators to secure the deal, including offering free licenses for broadcasting Activision Blizzard’s games and enabling cloud-based gameplay in the European region.

The deal was initially announced in January 2022, but regulatory concerns caused delays, extending the final completion date until October 2023.

Last July, the Federal Trade Commission in the United States, the European Commission, and the Competition and Markets Authority in the UK raised objections to the deal.

To facilitate the deal’s completion, Microsoft made concessions to reassure European regulators, including providing free licenses to consumers in the European area for broadcasting Activision Blizzard’s games, as well as free licenses to streaming providers, allowing European gamers to play games in the cloud.

In the United States, the Federal Trade Commission requested an initial court order in July to prevent Microsoft and Activision from finalizing the deal before obtaining full approval.

After five days of hearings, the judge sided with the two companies, the Commission then took the case to the U.S. appeals court, which rejected the request for a temporary halt to the deal.

It’s worth noting that Activision Blizzard ended the second quarter with a net income of $587 million and revenues amounting to $2.2 billion, reflecting a 34% increase year-on-year.