The Merge

In this buzz: Microsoft and Activision Blizzard; The history behind the deal and more…

In Brussels today, at a closed hearing, in front of the EU antitrust regulators, Microsoft President Brad Smith will try to defend the $69 billion bid for Activision Blizzard.

In short:
In January 2022, Microsoft announced the plans to acquire Activision Blizzard, the video game maker behind Call of Duty®, World of Warcraft®, Overwatch®, and the mobile game Candy Crush™.

Why it stir the pot:
– The deal attracted attention because it would give Microsoft more control of the total supply of video games which could become exclusive to its Xbox console.
– Sony claimed these game brands are “essential” and could influence people’s console-buying decisions.

In an op-ed, Microsoft offered Sony a 10-year contract that could simultaneously make Call of Duty® games available on PlayStation as their release on Xbox, but only if Microsoft completed the acquisition … Sony rejected it.

Nintendo and Valve:
In an attempt to persuade the European Commission lawyers, in December 2022, Microsoft made a deal with Nintendo to make Call of Duty® available on their consoles, including Switch. Microsoft also expressed its commitment to making franchise available to Valve Software’s online gaming platform Stream.

But…
… with partners this small, it was hard to convince the senior EU officials.
Shortly after, the ① US Federal Commission (FTC) announced it would sue Microsoft’s takeover of Activision. It was followed by ② legal action from 10 gamers who wanted to block the merger with Activision because it could create a monopoly in the industry.

💡 The Scope of Call of Duty (2020):

• 100 mill active users
• 250 mill players for all the series
• It accounts for the majority of Activision Blizzard’s net booking of $2.49 billion
• $27 billion: Life-to Date consumer spending.

❗The EU commission’s deadline to rule in favor or against the deal is April 11, 2023.