Microsoft seeks other ways to complete Activision Blizzard acquisition
In January of the preceding year, Microsoft orchestrated a purchase of gaming titan Activision Blizzard at a staggering $95 per share, catapulting the transaction’s total valuation to $68.7 billion. This acquisition marks Microsoft’s most extravagant spending spree in its storied history. Despite a plethora of skepticism surrounding the deal, Microsoft’s unflagging endeavors ensured approvals from regulatory bodies such as the State Administration for Market Regulation and the European Union. Yet, the merger is still confronted with opposition from other regulatory authorities, including the Competition and Markets Authority (CMA) in the UK.
The CMA declined Microsoft’s bid for Activision Blizzard on grounds of Microsoft’s dominant position within the cloud gaming market, expressing apprehensions about potential disruption to the market’s competitive equilibrium. They further posited that this acquisition could culminate in escalated prices, diminished choice, and stifled innovation for British gamers.
According to related media reports, Microsoft is actively exploring alternative methods to finalize the acquisition of Activision Blizzard, seeking legal avenues to render the transaction acceptable. Microsoft has recruited a team of legal counsel tasked with conducting the pertinent investigation. Perhaps, Microsoft may consider withdrawing Activision Blizzard from the UK market, instead continuing sales through a third party. In tandem, Microsoft might challenge the CMA’s ultimate veto power in court, regarding its issued prohibition as illicit.
In the purview of Phil Spencer, head of Xbox business, the acquisition of Activision Blizzard represents an integral element of Microsoft’s overall strategy, aimed at securing a leadership position in the gaming market. This is even more pertinent to the Game Pass subscription service, serving as an accelerator. To date, Microsoft’s acquisition of Activision Blizzard has garnered approval from 39 countries or regions. Beyond China and the EU, this includes Japan, South Korea, Brazil, South Africa, and Chile, amongst others. Australia, New Zealand, and Canada are anticipated to swiftly follow suit with their approvals.
