Page Loader
What is the latest in Microsoft's $69bn acquisition of Activision
The European Commission will likely approve the Microsoft-Activision deal

What is the latest in Microsoft's $69bn acquisition of Activision

Mar 03, 2023
03:42 pm

What's the story

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.

Context

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

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.

Nintendo

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.

Nvidia

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

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.

Other regulators

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.