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UK restricts Microsoft, Activision from buying interest in each other

An interim order prohibiting Microsoft and Activision acquisition has been issued by the UK’s antitrust watchdog. This comes weeks after the Competition and Markets Authority (CMA), the regulatory body, decided to prohibit the $68.7 billion merger of the two companies.

Microsoft and “Call of Duty” creator Activision were required to obtain the CMA’s “prior written consent” prior to completing any acquisitions related to their respective businesses, according to an order released by the CMA on Thursday.

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It is the latest action taken by the UK’s watchdog to increase supervision of the two businesses amid concerns that the competition will suffer as a result of the landmark agreement reached in January 2022.

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The primary worries of the regulator center on Microsoft’s potential for undue influence over a growing cloud gaming business in what would eventually become the largest takeover deal in gaming history.

The CMA barred Microsoft from buying Activision due to worries that the transaction will change the direction of the rapidly expanding cloud gaming business, resulting in less innovation and fewer options for UK gamers in the future, the regulator stated last month.

The CMA initially launched its investigation into the transaction in September 2022, with its initial notice regarding its worries coming in February.

Microsoft President Brad Smith disagreed with the CMA’s ruling from last month, saying the tech giant will appeal. He claimed that the CMA’s judgment revealed “a flawed understanding” of the market for cloud technology and that it demonstrated its choice to disapprove of a “pragmatic path” toward resolving any competition concerns.

Microsoft’s representative issued the following statement: “We remain firmly committed to this deal and look forward to presenting our case to the Competition Appeal Tribunal.”

On January 19th, 2022, Microsoft announced its intention to acquire Activision Blizzard for $68.7 billion. However, the UK government’s Competition and Markets Authority (CMA) expressed concerns that the acquisition could significantly reduce competition in the UK gaming market and ultimately lead to higher prices for consumers.

As a result, the CMA issued an interim order on April 5th, 2022, which temporarily prohibited Microsoft and Activision from integrating their businesses in the UK.

The proposed acquisition of Activision Blizzard by Microsoft is one of the largest in the history of the video game industry. Activision Blizzard is a leading publisher of video games, with popular titles such as Call of Duty, World of Warcraft, and Candy Crush.

Also Read: EU antitrust regulators seeking more info on Apple Pay

Microsoft, on the other hand, is one of the world’s largest technology companies and has been expanding its gaming business in recent years through the Xbox brand.

The UK’s Competition and Markets Authority (CMA) is responsible for ensuring that mergers and acquisitions do not result in a reduction of competition in the market. The CMA has the power to investigate mergers and acquisitions and can prohibit them if it determines that they would harm competition.

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David Crane : The Famous Videogame Guru and Co-founder of Activision

Video games have introduced us to a new world, and every game lover might be familiar with the names like Hideo Kojima and Sid Meier. These are the video game designers who are none less than the Hollywood superstars. But at the beginning of the video games, despite developing the most famous games, the designers did not get the due credits. They were sitting behind the name of the company that launched the game and just kept working months of tedious and insomniac hours. But then, some of the designers took control in their hands, and it was the time for a change. One such video game designer is David Crane, the co-founder of Activision, who is a superstar designer and is widely known for the video game Pitfall!.

Crane is an American programmer and video game designer who was born in Nappanee, Indiana, the US in 1953. After completing his school education from a local high school, he went to the DeVry Institute of Technology in Phoenix, Arizona, where he completed a Bachelor of Science in Electrical Engineering Technology degree. Soon after graduating as an engineer, he joined National Semiconductor as a hardware designer.

With time, he became interested in video game designing and development, so at the age of 29, he started working for Atari. He took the responsibility of developing games for Atari 2600. He also became the part of the team that was working on the Atari 800 computer operating system.

David Crane Activision
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During the late 70s, the main game developers, including Crane, Larry Kaplan, Alan Miller and Bob Whitehead, of the company were in talks with the company management to get the developers their due credit. At the time, the company was also under the acquisition of its new owner Warner Communications, and it has many unsolved issues as well. The company refused to give those developers any extra financial compensation or credits, as it was afraid that those developers could get better options elsewhere.

Based on a memo of the best-selling video games of the past few years, Crane had designed few of the best selling games of the company, yet he was not given any bonuses or even the credits for that. With 20 million sold copies of games developed by him, he only earned a $20,000 salary.

One fine day, during a Tennis match, Crane and Miller got into a serious discussion about how the companies were taking all the credit for the game development when it was all the hard work of the designer. Concluding to this, they planned to leave their jobs and start a new gaming company that would not only promote the company, but also the designer who designed the games.

In 1979, along with Miller, Kaplan and Whitehead, Crane left Atari to start their own company. But they had no idea from where to start, as at that time only the companies that manufactured the consoles published the games. To start a business, they needed the money and for that, they met another budding entrepreneur Jim Levy, who was already planning to start a business of manufacturing cassette tape drives. With the help of Levy, they managed to raise US$1 million in capital from Sutter Hill Ventures.

The five co-founders finally founded Activision on 1 October 1979. But they were hit by a lawsuit from Atari, claiming that the four developers from Atari had stolen the company secrets. So, despite the knowledge of Atari 2600 and its gaming development, they had to create Activision’s own version of games that differ from the Atari games visually.

But since all the four were experienced enough, the games that they built were way better and had credits for the developers along with the instruction manual.

In 1982, Crane developed the most successful game of his career, i.e., Pitfall!. Within one year of its launch, Activision sold 4 million copies of the game and became the second best-selling game of the year. It also made a total revenue of US$60 million in just one year for Activision. The game maintained its place in the Billboard charts for 64 weeks and was also awarded the game of the year in 1982. This was a game-changer for Crane, and he was famous in no time.

By 1983, the company has already hired around 60 employees. After working for seven years with Activision, Crane left the company in 1986 and co-founded Absolute Entertainment with Garry Kitchen. With Absolute, he developed two of the most famous games of his career, David Crane’s Amazing Tennis and A Boy and His Blob: Trouble on Blobolonia. In his entire career, he has developed over 30 video games.

Crane came with another venture in 1995, named as Skyworks Technologies and served the company as the CTO. His last known game as a game designer is March of the Penguins (2006). His estimated worth as reported in 2016 was $200 million. Currently, he is working as an independent video game developer and video game expert witness. The decision he, and his fellow programmers, to build a company that promoted the designers of the video games, not only made them celebrities, but the other designers in the world also started getting their deserved recognition.