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Microsoft beats FTC in historic bid to land Activision Blizzard

Microsoft has passed arguably the most vital hurdle to becoming sole owners of Activision Blizzard in the most expensive tech deal of all time. Is this the beginning of an anti-competitive market within gaming?

The controversial deal which will dwarf what Disney paid for Marvel is a huge leap closer to getting done.

First announcing its bid to buy Activision Blizzard – the acclaimed publisher behind Call of Duty, World of Warcraft, and Diablo, among many others – back in January 2022 for a record fee of $69bn, Microsoft could officially wrap the deal up before the end of July.

Our initial reaction to last year’s announcement was one of trepidation, which was shared by a large portion of the gaming community and many industry-insiders.

With such financial muscle, it was posited that tech conglomerates hoarding our favourite franchises and properties could lead to an anti-competitive market and slippery slope to complete monopolisation. This concern was brought to light in an official capacity by the Federal Trade Commission (FTC).

In December, the US watchdog requested that lawmakers block a proposed merger on the grounds that it would set a dangerous precedent for console exclusivity, potentially leaving PlayStation and Nintendo out in the cold. This week, however, Judge Jacqueline Scott Corley dismissed the FTC’s challenge.

‘The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,’ she said.

Many believed this legal case would be the crucial point at which Microsoft’s bid fell apart, but this triumph could see a deal thrashed out before the previously agreed deadline of June 18 – though this may be extended.

Having gained approval from the US and the EU, which green-lit the deal earlier this year, Microsoft is now focusing its energy on final stumbling block of the UK and its Competition and Markets Authority (CMA).

Previously unsatisfied with Microsoft’s pledge to play fair, the CMA rejected the initial proposal and had been due back in court before the end of the month. We now understand that both parties have paused the process while Microsoft modifies certain details to turn the tide.

‘After today’s court decision in the US, our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA,’ said Microsoft president Brad Smith.

While scepticism continues over Microsoft’s motivations, in the immediate future the flagship property of Call of Duty will remain open to rivals, including a 10-year contract with Nintendo as a condition of the deal.

Nevertheless, only when ink is dry on the paper will we start to see what Microsoft really has planned.