Big tech-fame Microsoft’s Activision Blizzard $69 billion deal is hovering precariously on the edge of the precipice. The Microsoft Activision acquisition’ timeline has partaken in enough controversial conundrums to last for a long time. Microsoft’s acquisition of Activision was considered to be the largest video game acquisition in history.
Right on the cusp of completion, UK’s antitrust regulator Competition and Markets Authority (CMA) blocked Microsoft’s biggest acquisition ever. The proposed Activision Blizzard acquisition details include an all-cash transaction valued at $68.7 billion. In the wake of skirting critical scrutiny from antitrust regulators worldwide, what is the latest news on the Microsoft Activision acquisition?
Activision Blizzard, the world’s largest video game developer, is behind the popular franchises of Call of Duty, Candy Crush Saga, Warcraft, Diablo, and Crash Bandicoot.
And at the helm of the Xbox gaming console, is tech giant Microsoft, a $200 billion company that could lay the first stone of cloud gaming – providing access to games from any device powered by an internet connection.
But before Microsoft completes the Activision Blizzard acquisition, they are slated for more dramatic challenges in the merger that was announced over a year ago. The major setback from CMA is a surprise and a shock to the industry that believed that the regulator was supporting the win of the acquisition. After nearly a year and a half of the Microsoft Activision acquisition announcement, the gaming industry has witnessed the fiercest regulatory battle ever.
With a recap of the complications, here is the Microsoft Activision $69 billion deal timeline. Highlighting all the intrinsic revelations from 3 million documents backed with more than 2,100 emails from investigational regulators, the Microsoft Activision acquisition timeline is genned up on a gripping chronology.
Microsoft Activision Blizzard Acquisition Timeline So Far
In 2022
January:
The history of Activision Blizzard was glissading into helter-skelter with ongoing sexual harassment lawsuits, game release delays, and severe executive turnover. Activision CEO Bobby Kotick and Microsoft gaming CEO Phil Spencer discussed mergers. On January 18th, 2022, Microsoft announced the Activision Blizzard acquisition for a whopping $68.7 billion, Microsoft’s biggest acquisition ever. The target closing date was earmarked on July 18th, 2023.
April:
Four US senators including Sen. Bernie Sanders and Sen. Elizabeth Warren indited a letter to the FTC citing their ‘deep’ concerns about how the consolidations in the tech industry were impacting employees. After this, the first regulatory actions echoed in the US markets.
June:
The growing unionization movement in Activision Blizzard was a dicey predicament for Microsoft, which was being scrutinized for its actions further on. The Communications Workers of America and Microsoft entered into a Labor Neutrality Agreement on June 13th, 2022. President Brad Smith assured neutrality for any labor organizing efforts in both Microsoft and Activision Blizzard.
August:
On the first day of the month, many regulatory documents were made public in Brazil, rousing up controversies for the Microsoft Activision acquisition. Rival company Sony aired concerns about Call of Duty becoming exclusive to Xbox users. Sony beguiled regulators that COD was an unparalleled benchmark in gaming shooter series and could influence console purchasing decisions.
Microsoft retaliated by accusing the PlayStation maker Sony of being resentful of competition and that Sony was railing against the newer monetization models which could pose challenges for existing business models. Furthermore, the disparity between the gaming rivals intensified after Microsoft pointed out that Sony was paying for blocking rights against Game Pass.
September:
Spencer revealed that Microsoft was primed to plunk COD and other Blizzard games on Game Pass. He also expended a contract extension to Sony for guaranteeing Call of Duty on PlayStation with content parity for many years. But, Sony claimed Microsoft’s offer was inadequate. PlayStation CEO Jim Ryan also indicated that COD was a major bargaining chip in negotiations.
The CMA hinted at its opposition to the Microsoft Activision $69 billion deal alluding to “harming rivals”.
The regulator ordered an in-depth Phase 2 investigation, which began on September 15th, 2022 after Microsoft was inadept at addressing the CMA within the window of five days.
October:
Saudi Arabia was the first market to stamp its approval on the Microsoft Activision acquisition timeline, and Brazil followed. Subsequently, the CMA detailed concerns that the acquisition could chaperone potential anti-competitive effects to subscription and cloud gaming services.
Microsoft refuted the claims and counter-accused the CMA for only using Sony’s ‘self-serving’ statements as evidence. Microsoft began to appeal to regulators to approve the Activision acquisition on the basis of no incentive to alienate the series’ fans or besmirch the popularity of COD and Xbox.
November:
The European Commission opened an in-depth investigation into the Microsoft Activision acquisition on November 8th, 2022. The EU’s decision on the merger was scheduled to be revealed on March 23rd, 2023.
“Microsoft may foreclose access to Activision Blizzard’s PC video games and console.
– EU’s concerns
On November 11th, Microsoft decided to raise the bids by tripling the time to commit COD on a rival platform – offering Sony a 10-year deal to keep Call of Duty on PlayStation.
Towards the end of the month, Sony’s desperate attempt to cause obstructions in the Microsoft Activision acquisition timeline resulted in another plea to the CMA. In the letter, Sony warned that Microsoft’s ownership of franchises like Overwatch and Call of Duty could create irrevocable losses, harm indie developers, and even strengthen Game Pass at the expense of rival services. Fearing losing revenue from microtransactions, Sony believed it could impact its ability to invest in future hardware and gaming technology, making the PS5’s successive console vulnerable to consumer switching.
December:
Microsoft tried to sway the regulators against the notion that the tech giant would impose restrictions on Call of Duty on rival platforms. With a promising future ahead for Nintendo Switch, Microsoft and Nintendo entered a 10-year agreement for COD.
But just a day later, the FTC sued Microsoft for blocking the deal. With similar base allegations of giving the power to Microsoft to suppress competition, the FTC trial date was set for August 2023.
“The acquisition of a single game by a third-place console manufacturer cannot upend a highly competitive gaming industry, particularly when the manufacturer has clarified that it will not withhold the game.”
– Microsoft’s defense against the FTC lawsuit.
In 2023
January:
As part of its defense for the FTC trial, Microsoft subpoenaed Sony. This sleazy move by Microsoft intended to reveal the sensitive internal workings of Sony’s game development practices as early as 2012.
“We seek to block Microsoft from gaining control of an independent leader of gaming and using it to harm the fast-evolving gaming market”
– Holly Vedova, FTC Director
After several legal hither and thither, Microsoft was permitted to request Sony’s data as part of its case, but not beyond 2019.
February:
The possibility of Microsoft selling off Call of Duty made rounds in the rumor mill. The CMA believed that the potential structural remedies for Microsoft Activision acquisition hindrances included this plausibility.
Microsoft’s 60 percent share of the growing cloud gaming market could alter the future of gaming. Yet, Smith rebuked the concerns stating that the deal did not have any viable path ahead if COD had to be spun out of Activision.
On February 21st, 2023, Microsoft brought Nvidia’s GeForce onboard the cloud agreement with Nintendo, with a public show in Brussels. Post these two deals, Microsoft signed up with Boosteroid and Ubitus.
March:
The EU indicated approval of the Microsoft Activision Blizzard acquisition. Microsoft’s agreements with Nintendo and Nvidia assuaged the regulators’ concerns. The EU extended its deadline from April 25th to May 22nd on seeing continual remedies from the tech giant that soothed the EU’s worries. The Microsoft Activision acquisition lawsuit alleged by a group of plaintiffs, won a dismissal.
On March 24th, the CMA backtracked on its original stance and shocked Sony.
The authority no longer believed that the $69 billion deal would lessen the competition in the console market or prove that Microsoft would bridle Call of Duty from rival platforms. While the CMA was still concerned about the implications of the Microsoft Activision Blizzard deal, Sony called out the authority’s reversal as ‘unprecedented, irrational, and surprising.’ On March 28th, Japan approved the acquisition.
April:
South Africa joined the legion of countries approving the Microsoft Activision acquisition timeline after Saudi Arabia, Brazil, Chile, Japan, and Serbia.
But on April 26th, the CMA once again blocked the deal on the moral grounds of harming competition in the nascent cloud gaming market of the UK.
On a final note, the acquisition is not yet burned to cinders – the EU is scheduled to announce its final verdict on May 22nd, 2023 while the US Federal Trade Commission (FTC) will be taking the Microsoft lawsuit to court in August.
Microsoft is confident of a positive outcome, whilst already preparing an appeal to the CMA, closely with the Activision Blizzard leaders. The large looming speculations if the merger will succeed, have been haunting the Microsoft Activision acquisition timeline – but can only be answered in time.
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