Microsoft defends multi-billion dollar deal – downplays Activision titles

Microsoft announced earlier this year its intention to buy publisher Activision Blizzard. But the deal must first withstand a review process.

Redmond, Wash. – Earlier this year, it was announced that technology group Microsoft was planning to buy video game giant Activision Blizzard. For this Microsoft wanted to pay a sum of 68.7 billion US dollar. During a business takeover of this magnitude, several independent control commissions intervene to ensure that the laws in force and antitrust rights are respected. Microsoft must now resolve antitrust issues in order to finalize the deal.

Last name Microsoft
CEO Satya Nadella (4 Feb. 2014-)
Creation of April 4, 1975, Albuquerque, New Mexico, USA
Turnover $125.8 billion (2019)
Founder Bill Gates, Paul Allen
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Microsoft wants to buy Activision Blizzard, but there is still a long way to go

What is it about ? At the beginning of the year, the Microsoft group surprised the entire video game sector by announcing its intention to buy the publisher Activision Blizzard. Only the previous year, Microsoft had bought the parent company of the game publisher Bethesda. In April 2022, Blizzard shareholders also agreed to the transaction. However, before the sale can be concluded, a review procedure must first be launched in order to clarify the legal framework for the acquisition.

What is this examination procedure? As part of Microsoft’s review of Activision Blizzard’s acquisition, Microsoft must provide information to various review boards and government authorities. Microsoft had to respond to the New Zealand Commerce Commission.

Here’s what Microsoft thinks of the deal: When it was said that the acquisition could harm general competition in the market, Microsoft responded in the following way:

“With specific regard to Activision Blizzard video games, there is nothing unique about the video games developed and published by Activision Blizzard that would constitute a ‘must have’ for competitive PC video game distributors. and on console and which could raise concerns about market foreclosure.”

What does Microsoft mean by this? This response from Microsoft may seem odd at first. Why would Microsoft be interested in a company whose products are not unique and do not constitute what is called a “must have”? The answer is simple: as part of the review process, Microsoft must first eliminate the reservations expressed by the various competition law commissions in order to be able to carry out the planned acquisition.

It is also to convince the reviewers that Microsoft is not putting itself in a monopoly position through the agreement and therefore not violating the prevailing market conditions. It would not be wise to convince the listeners by its own statements that Microsoft is securing enormous market power with this agreement.

Leading tech companies in the industry were also asked about their stance on the deal. Interestingly, only direct competitor Sony opposes Microsoft’s deal. It also appears to be why Microsoft’s response downplays Activision Blizzard’s games.

This is the biggest deal in the gaming industry: Microsoft’s takeover process is expected to be completed as planned by summer 2023. The scale of the deal is unique in the video game industry so far, a comparable acquisition has never happened before. Microsoft has never spent such sums on any other company either. The most expensive company Microsoft had acquired so far was LinkedIn in 2016 for US$26.2 billion.

Microsoft clearly seems to see the future of the group in gaming. Overall, Microsoft made a relatively “cheap” deal with the purchase of Activision Blizzard. After the summer 2021 sexism scandal at Activision Blizzard, the publisher’s stock also fell by nearly half. Microsoft therefore took advantage of a favorable opportunity. According to industry insiders, it was Activision Blizzard that offered to buy from various groups. Discussions also reportedly took place with Facebook.

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