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Microsoft has completed its historic $69 billion acquisition of Activision Blizzard, makers of popular titles such as Call of Duty and World of Warcraft. This acquisition represents the largest deal ever in the gaming industry. The UK regulatory body, the Competition and Markets Authority (CMA), has given its approval, and Activision Blizzard CEO Bobby Kotick has confirmed his exit by the end of 2023. This article aims to provide a comprehensive analysis of the acquisition and its implications for the gaming industry. Background of the Deal In a transaction worth $69 billion, Microsoft has fully acquired Activision Blizzard. This move followed the approval from the Competition and Markets Authority, which initially blocked the acquisition due to antitrust concerns. Microsoft's gaming division, headed by Phil Spencer, expressed enthusiasm over incorporating Activision's assets, especially popular gaming titles like Call of Duty and Candy Crush, into its portfolio. Regulatory Approval and Obstacles Despite initial hesitancy, the Competition and Markets Authority eventually approved the deal. This came after Microsoft made concessions, including transferring cloud gaming rights for Activision titles to Ubisoft for 15 years. Sarah Cardell, CEO of the CMA, criticized Microsoft for their initial tactics but acknowledged that the modified deal would prevent Microsoft from dominating the burgeoning cloud gaming market. Stakeholders and Leadership Changes Upon completion of the deal, Activision Blizzard CEO Bobby Kotick announced that he would be stepping down at the end of 2023. The exit of Kotick, along with his supportive stance on the acquisition, indicates a willingness for smooth integration between Microsoft and Activision Blizzard. Notably, Kotick is set to receive a $400 million payout, while chairman Brian Kelly will receive $100 million based on their shareholdings. Market Competition and Rival Concerns Sony, the maker of the PlayStation console, has expressed concerns over the acquisition, fearing that flagship titles like Call of Duty might become Xbox exclusives. Despite these worries, Phil Spencer, the head of Microsoft Gaming, assured that players across different platforms would continue to enjoy access to these games. Financial Implications Microsoft's cash purchase of Activision Blizzard comes at a premium price of $95 per share. This acquisition is expected to significantly bolster Microsoft's revenue through blockbuster titles such as World of Warcraft. Additionally, Microsoft aims to enhance its Xbox Game Pass service by adding more titles from Activision Blizzard's extensive catalog. Impact on Cloud Gaming and Services Microsoft has ambitious plans for integrating Activision's titles into its cloud gaming services. However, as part of the deal, cloud streaming rights for Activision titles have been handed to Ubisoft for 15 years outside the European Economic Area (EEA). This move is aimed at maintaining a competitive market in cloud gaming, a rapidly evolving sector. Future Prospects With the acquisition, Microsoft is set to become an even bigger giant in the gaming industry, potentially surpassing Nintendo in market share. The addition of Activision's mobile game studio will allow Microsoft to diversify into mobile gaming, leveraging the success of titles like Candy Crush. Moreover, this deal could make Microsoft's Xbox Game Pass service more attractive to consumers, offering a more extensive range of gaming titles. Final Thoughts The acquisition of Activision Blizzard by Microsoft is a transformative event in the gaming industry. It signifies a new era where large tech companies could potentially dominate the sector. While the deal has passed regulatory scrutiny, its long-term impact on market competition remains to be seen. Nonetheless, this acquisition is expected to offer more gaming options and innovation, thus benefiting consumers. Also Read:

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Competition and Markets Authority

Microsoft Acquires Activision Blizzard: A Comprehensive Analysis of the Gaming Industry’s Largest Deal