What is the latest in Microsoft's $69bn acquisition of Activision
Microsoft's $69 billion proposed acquisition of Activision Blizzard has been in limbo for a while now. The deal, which has irked regulators around the world, might finally see the light of day. Per Reuters, EU regulators are likely to give their go-ahead to the deal. However, the deal is still facing close scrutiny in the US and UK.
Why does this story matter?
- Microsoft announced the acquisition of Activision, the company behind iconic gaming franchises, including Call of Duty, in January last year. Since then, the deal has been under the regulatory scanner.
- The deal, which can potentially be the biggest gaming deal ever, is considered by many as anti-competitive. However, Microsoft has stuck by the deal, trying to bring everybody on board.
EU is set to give the deal a green light
EU regulators are scheduled to decide on the acquisition by April 25. At first, it did not seem the European Commission would give the deal a green light. However, Microsoft's recent licensing deals with NVIDIA and Nintendo may have changed the optics of the deal. The proposed acquisition is now set to sail through EU scrutiny.
Microsoft signed a 10-year deal with Nintendo
One of the significant concerns about the Microsoft-Activision merger is how it would affect the competition. Considering the popularity of Activision's games, those who object to the deal do have a point. To avert these concerns, Microsoft signed a 10-year deal with Nintendo to put Call of Duty on Nintendo platforms on the same day as Xbox.
Microsoft also signed a deal with NVIDIA
The company signed a similar deal with NVIDIA, an American multinational giant in the gaming space. NVIDIA, along with Sony, was strongly against the deal from the beginning. Per the deal, Microsoft agreed to bring Xbox PC games to NVIDIA's cloud gaming service, which is a direct rival of Microsoft's cloud gaming service. Microsoft said the partnership "resolves NVIDIA's concerns with Activision Blizzard."
Sony is not ready to budge from its position
Sony remains the sole objector of the historic deal. It does not look like that would change, ever. Microsoft has offered a similar 10-year deal to Sony, but the PlayStation maker rejected the offer. After a recent meeting with European regulators in Brussels, Microsoft's vice president Brad Smith called out Sony for its dominance in the console market.
EU approval would put pressure on others
An EU approval would put a lot of pressure on other regulators, including the FTC and UK's Competition and Market Authority (CMA), to approve the deal. The CMA has suggested making structural changes to the deal that include forcing Microsoft to sell Call of Duty. Microsoft has not agreed to this. EU approval would make it hard for others to justify their opposition.
