After antitrust fights, Microsoft completes its purchase of Activision Blizzard, the company that makes Call of Duty
On Friday, Microsoft completed its $69 billion acquisition of Activision Blizzard, one of the most costly tech purchases in history that might impact the video gaming industry.
Microsoft announced the agreement seven hours after Britain's competition watchdog reversed its earlier judgment to prohibit the merger, removing the penultimate hurdle.
Microsoft's Xbox, which ranks third in sales after Sony's PlayStation and Nintendo, will benefit from acquiring Call of Duty, Diablo, and Overwatch studios. The software giant also wants to add Activision titles to its multi-game Netflix-like subscription service.
The transaction took nearly 22 months to conclude due to rivals and government officials' concerns that Microsoft could limit competition with its huge game library.
Microsoft has always defended the partnership as good for gaming, claiming it wanted to deliver Activision titles to more people on more platforms rather than steal them from competing console makers.
“Whether you play on Xbox, PlayStation, Nintendo, PC or mobile, you are welcome here – and will remain welcome, even if Xbox isn’t where you play your favorite franchise,” Xbox CEO Phil Spencer said Friday.
Antitrust authorities in over 40 countries have approved Microsoft's January 2022 deal. The 27-nation European Union approved it after it agreed to let consumers and cloud gaming platforms stream its titles without fees for 10 years.
The acquisition was most opposed by British and American regulators. Sony was worried it would restrict PlayStation users' access to Activision's Call of Duty.
Dell's 2016 $60 billion purchase of EMC was the priciest tech acquisition till recently. Around the same time, Microsoft acquired LinkedIn for $26 billion, its biggest deal.
When disclosed, Microsoft valued the Activision transaction at $68.7 billion, “inclusive of Activision Blizzard’s net cash,” but it paid $95 per share, closer to $75 billion.
Activision, founded in 1979 by former Atari Inc. workers, has made or acquired numerous successful video games, including Pitfall, Guitar Hero, and World of Warcraft. Microsoft valued Activision's King unit, which made Candy Crush Saga.
Bobby Kotick became CEO in 1991 after buying the company from bankruptcy with a partner.
Kotick announced his departure Friday, saying he is “fully committed to helping with the transition” through 2023 and will remain CEO of the Microsoft subsidiary until then.
“Combining with Microsoft will bring new resources and new opportunities to our extraordinary teams worldwide,” Kotick wrote to staff.
Sony's PlayStation leads the business, but Microsoft has been buying gaming studios to attract more gamers to Xbox. The parent firm of Bethesda Softworks, maker of Elder Scrolls, Fallout, and Starfield, was acquired for $7.5 billion last year. Microsoft's 2014 $2.5 billion acquisition of Swedish developer Mojang produced Minecraft, a popular game.
Sony bought Bellevue, Washington-based independent game publisher Bungie Inc. for $3.6 billion last year, near Microsoft's headquarters.