Microsoft has been trying to acquire Activision Blizzard (an American developer and publisher of entertainment content for mobile devices, game consoles, and personal computers) since January 18, 2022. The prolonged deal process is due to US and UK regulators attempting to block the deal. Since the US and UK both have “cloud gaming markets,” they have the autonomy to regulate the markets in their respective ways. The United States FTC had tried blocking the deal over concerns that Microsoft’s Xbox would be too dominant in the market, as it would have ownership over top game franchises such as “Call of Duty.” On July 20, the FTC withdrew its case, as it could not argue its opposition effectively to Federal Judge Jacqueline Scott Corley. However, the UK's Competition Markets Authority (CMA) successfully blocked the deal, jeopardizing the entire Activision Blizzard acquisition.
Microsoft then restructured its acquisition deal in August 2023 to ease the CMA’s regulation. Pacts with Nintendo, Sony, and Nvidia accompanied the new deal. The pacts will last for a decade; within that time frame, the three companies mentioned will have access to Activision franchises - Sony was only given “Call of Duty” in their agreement. Sony had been vocally opposed to Microsoft's acquisition, likely due to the massive intellectual property benefit Microsoft would be gaining. Sony had previously acquired Bungie, a developer/publisher company that developed games such as Halo and Destiny. Yet Bungie has significantly less strategic value than Activision, as Bungie has 13 patents compared to Activision’s 1,073.
Microsoft’s new deal will sell the cloud rights of current and future Activision games released over the next 15 years to Ubisoft. Since Ubisoft will be able to distribute games to players on both Xbox and Playstation, regulation is expected to be less strenuous on the deal. There are talks of Microsoft looking to acquire Ubisoft somewhere down the line, but that may be difficult given the current regulatory climate. As the deadline for the merger has been extended to October 18, Microsoft hopes that the CMA will approve the deal soon before it expires.
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