(London) Microsoft, owner of Xbox, will be able to finalize the purchase of the video game factory Activision Blizzard, publisher of Call of Duty, Diablo And candy Crushafter having the final green light from London on Friday, which removes the last regulatory obstacle to the acquisition.
After receiving a refusal in April, Microsoft submitted to the British authority at the end of August an amended version of its plan to buy the American video game publisher. This is “authorized by the CMA”, announced the British regulator in a press release.
This $69 billion mega-purchase, announced in January 2022, is a very expensive bet by Microsoft to strengthen itself in “gaming” and help its successful Xbox console compete with Sony’s PlayStation.
This acquisition will make Microsoft the third global player in video games in terms of turnover behind Tencent and Sony, thus passing Apple.
“The price tag is high, but Microsoft can afford it, so the financial implications aren’t too much of a concern.” The gaming industry is huge and growing rapidly, which makes the possibility of profit growth very exciting for Microsoft,” Sophie Lund-Yates, analyst at Hargreaves Lansdown, told AFP.
The global video game market is estimated at $300 billion by the consulting firm Accenture.
“Microsoft’s enormous weight means that other game makers will have to improve their tactics if they want to remain competitive,” she adds.
Microsoft plans in the new version of its takeover project notable transfers: the online gaming rights of Activision Blizzard – including those of global hits Call of Duty And candy Crush – will be sold to French company Ubisoft.
This sale concerns online games (“cloud gaming” or “cloud streaming”) PC and console from Activision produced over the next 15 years (excluding the European economic area). It “will prevent Microsoft from blocking competition in the field […] while this market is taking off,” welcomed the CMA.
The regulator gave a provisional agreement at the end of September, but reported “limited residual concerns”. The fear was that Microsoft could circumvent or not enforce certain provisions of the agreement with Ubisoft.
The regulator assures Friday that the assurances given by Microsoft are sufficient “to guarantee that this agreement is correctly implemented”.
“Widely awaited” decision
“We are grateful for the in-depth review (of the new agreement) and the decision of the CMA today,” immediately reacted Microsoft President Brad Smith in a statement sent to AFP.
“We have now cleared the final regulatory hurdle to finalize this acquisition, which we believe will benefit gamers and the gaming industry worldwide,” he added.
“We now have all the necessary regulatory approvals to close (the transaction) and we look forward to bringing joy and connection to even more players around the world,” added Activision CEO Bobby Kotick.
“Today’s decision was widely anticipated and brings to an end what has been a tumultuous process for all parties involved,” said Alex Haffner, competition lawyer and associate partner at Fladgate.
The CMA feared that the operation in its initial format would reduce competition too much in the dematerialized games market. Microsoft dominates it with more than 25 million subscribers to its dedicated online platform.
If Sony and Nintendo have launched a similar service, the offer “has absolutely nothing to do” with that of the American giant in terms of the catalog of games available and the power of the “cloud” infrastructure offered, explained to the AFP Julien Pillot, economist specializing in cultural industries, last April.
Other tech giants have also launched into this niche, such as Amazon (Luna), with much less success.
The European Commission, for its part, approved this acquisition in May. The American Competition Authority, the FTC, for its part, suspended in July the administrative court proceedings that it had initiated in December against the acquisition as it was initially envisaged.
Microsoft had challenged the British blockade in court. But at the beginning of July, he preferred to suspend the legal proceedings to find common ground with the regulator.