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Microsoft's $69 billion Activision Blizzard deal cleared by Britain

Microsoft’s $69 Billion Activision Blizzard Deal Cleared by Britain

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on Friday, Xbox creator Microsoft completed its 69-billion-dollar acquisition of Activision Blizzard, bolstering its position in the video gaming industry with top-grossing games like “Call of Duty” to more effectively fight with Sony, the sector’s leader.

Microsoft's $69 billion Activision Blizzard deal cleared by Britain
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The largest gaming merger, first announced in January 2022, overcame its final major barrier later in the day when Microsoft consented to sell off streaming licenses for Activision’s titles to ease competition concerns.

The accomplishment is a significant victory for the American tech company in its campaign to draw more customers to its Xbox systems and Game Pass membership service. Sony, whose PlayStation game systems sell more than the Xbox, generates more gaming income than Microsoft.

While Activision’s chief executive officer Bobby Kotick will continue in his position until the end of 2023, Microsoft Gaming’s chief executive officer Phil Spencer will be in charge of the company’s operations.

Spencer has hailed the acquisition as an opportunity for Microsoft to enter the greater than 90 billion-dollar mobile gaming industry.

Famous mobile games from Activision like “Candy Crush Saga” as well as “Call of Duty Mobile” were left out of the cloud streaming agreement that Microsoft made with Ubisoft Entertainment of France to win Britain’s permission.

“Microsoft instantly has more than $3 billion of mobile revenues,” said Wedbush Securities analyst Michael Pachter.

“The big benefit is that Microsoft has a vision that they are going to deliver games through a subscription, and they need more content to give subscribers. So, this is a big step toward having sufficient content,” he said.

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The Federal Trade Commission of the United States continues to oppose the acquisition despite having been unsuccessful in doing so in the past. The FTC stated on Friday that it will assess Microsoft’s contract with Ubisoft while concentrating on its petition for review.

Analysts, though, predict that not much will change.

“The impact of an FTC challenge will be limited to incremental concessions in the future,” D.A. Davidson analyst Gil Luria said.

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Also Read: Google’s Pichai Decried Bad ‘Optics’ of Search Engine Deal With Apple

The CMA believes that Microsoft’s streaming capitulation is a turning point and said that it was the sole rival agency in the world to achieve this result.

“The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers,” it said in a statement.

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Did the U.K. Just Kill the Microsoft-Activision Blizzard Deal?

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In response to concerns that it would impede competition in the rapidly expanding cloud gaming business, British regulators on Wednesday rejected Microsoft $69 billion acquisition of video game developer Activision Blizzard. This prevented the largest tech deal in history.

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In its final report, the Competition and Markets Authority stated that “the only effective remedy” for the significant loss of competition “is to prohibit the Merger.” The organizations intend to file an appeal.

Due to concerns that Microsoft would gain control of well-known game franchises like Call of Duty, World of Warcraft, and Candy Crush, rival Sony vigorously opposed the all-cash transaction, and regulators in the United States and Europe closely examined it.

Also Read: Amazon is working to boost the capability of Alexa. Here’s how

Concerns raised by the U.K. watchdog centered on how the transaction might impact competitiveness in cloud gaming, which involves streaming games to smartphones, tablets, and other devices. Players no longer need to purchase pricey consoles and gaming laptops as a result.

According to Martin Colman, chair of the Competition and Markets Authority’s independent expert panel looking into the agreement, cloud gaming has the potential to transform the industry by offering players more flexibility over how and where they play. In this new and fascinating sector, he continued, “It is critical that we protect competition.”

The transaction still has our full support, and we will appeal, stated President Brad Smith in a statement. The watchdog’s judgment, according to him, “rejects a pragmatic path to address competition concerns” and deters tech investment and innovation in the UK.

Smith stated, “We’re especially disappointed that, after a lengthy decision, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.” Likewise, Activision retaliated, stating that it will “work aggressively with Microsoft to reverse this on appeal.”

Last month, regulators raised their objections to the agreement, stating that it wouldn’t be advantageous for Microsoft to restrict Call of Duty to its Xbox gaming platform. The agency said on Wednesday that it had looked “in considerable depth” at Microsoft’s suggestions to allay competition worries, but that it had concluded that those remedies would necessitate its supervision, whereas blocking the merger would enable cloud gaming to evolve naturally.

Regulators came to the conclusion that if the acquisition went through, it would strengthen Microsoft’s edge by giving it ownership over important game franchises, given its dominant standing in the cloud computing sector.

Late last year, the US Federal Trade Commission filed a lawsuit to stop the agreement between Microsoft and Activision Blizzard. The FTC action is still in the document discovery phase, and a hearing to present evidence is set for August 2.

Activision Blizzard

Microsoft To Buy Activision Blizzard In All-Cash Transaction Valued At $68.7 billion.

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Microsoft announced on Tuesday that it would buy videogame publisher Activision Blizzard for $68.7 billion in an all-cash deal, or $95 per share, including Activision Blizzard’s net cash. When the deal closes, the Redmond-based software giant will be the world’s third-largest gaming company by revenue, behind Tencent and Sony. To put the staggering sum into perspective, the deal is worth approximately Rs 5,12,000 crore, or Rs five lakh twelve thousand crores in Indian currency.

According to Microsoft, the transaction is subject to customary closing conditions, regulatory approval, and Activision Blizzard shareholder approval. The transaction is set to close in the fiscal year 2023. Activision Blizzard and Microsoft Gaming will continue to operate independently until the transaction is completed.

Activision Blizzard is the parent company of Activision, a video game developer based in the United States known for titles such as “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty,” and “Candy Crush.” Activision is well-known in the gaming community for its titles and regular eSports events.
The company now has studios all over the world and employs about 10,000 people. Bobby Kotick will remain the CEO of Activision Blizzard following the acquisition. The business will carry on as usual, with a focus on accelerating revenue growth. The Activision Blizzard business will be reported to Phil Spencer, Microsoft Gaming’s CEO.

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Microsoft’s offer of $95 per share represents a 45 percent premium over Activision’s Friday closing price. Before being halted for news, Activision’s stock was up nearly 38% at $65.39. Microsoft’s Game Pass, which now has over 25 million subscribers, will benefit from the acquisition. Activision Blizzard games will be included in the game pass, according to the company.
During the pandemic, demand for video games has increased as consumers who are stranded at home play more games to keep themselves entertained. Activision’s library of games, including Call of Duty and Overwatch, gives Microsoft’s Xbox a leg up on Sony’s PlayStation, which has had a more consistent stream of exclusive games for years.

Take-Two Interactive Software, a rival videogame publisher, announced last week that it would buy FarmVille creator Zynga for $11 billion in cash and stock, marking one of the largest industry-wide acquisitions of all time.
Bobby Kotick will remain CEO of Activision Blizzard, according to Microsoft, and he and his team “will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth.” The Activision Blizzard business will report to Phil Spencer, Microsoft Gaming’s CEO, once the deal is completed.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today,” Microsoft Chairman and CEO Satya Nadella said in a statement. “Gaming will play a key role in the development of metaverse platforms.” We’re putting a lot of money into world-class content, community, and cloud to usher in a new era of gaming that prioritizes players and creators and makes gaming safe, inclusive, and accessible to everyone.”
“Players all over the world love Activision Blizzard games, and we believe the creative teams are working on their best work yet,” said Phil Spencer, Microsoft Gaming’s CEO. “Together, we will create a future in which people can play their favorite games virtually anywhere.”

Source: https://gadgets.ndtv.com/

“Our incredibly talented teams have created some of the most successful games for more than 30 years,” said Bobby Kotick, CEO of Activision Blizzard. “The combination of Activision Blizzard’s world-class talent and incredible franchises, as well as Microsoft’s technology, distribution, talent access, ambitious vision, and shared commitment to gaming and inclusion, will help ensure our continued success in an increasingly competitive industry.”

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Activision Blizzard – The Journey From Bankruptcy to World’s Largest Gaming Company.

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Activision Blizzard is a famous gaming publisher based in Santa Monica, California, US. Though the company is only 13 years old, it has its roots related to the leading French media conglomerate, Vivendi SE, and 40 years old video game publisher, Activision, Inc. The two companies are big names in their industry, and Activision Blizzard is the result of an $18.8 billion merger held between the two in 2008. In the merger, Vivendi merged its game publishing unit with Activision and held a 52% majority stake in the new company. But by 2015, Activision acquired Activision Blizzard completely.

A Brief Introduction

Though the journey of Activision Blizzard has been quite small, it has been able to break many records in the field of the gaming industry. The company is now counted among the largest game companies in the world. In fact, it was the largest company in America and Europe based on its annual revenue in 2018. As of 2020, the recorded company revenue for Activision Blizzard was around US$8.09 billion, and 9,500 employees are working for it.

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Activision, Blizzard Entertainment, King, Major League Gaming, Activision Blizzard Studios, and Activision Blizzard Consumer Products Group are some of its subsidiaries.

The Founding of Activision Blizzard

Despite Activision was a famous gaming publisher, as time went by, massively multiplayer online (MMO) gaming was taking all the limelight around 2005-06 and had become really popular in a very small time. Activision was struggling to reach out to a larger audience as it was still selling single-player games. To deal with this situation, Activision went on to talk to the French media conglomerate Vivendi, which owned a small gaming division itself. The two gaming subsidiaries of Vivendi were Sierra Entertainment and Blizzard Entertainment, and Bobby Kotick, the owner of Activision, offered to invest in the latter to have access to Blizzard’s successful MMO, World of Warcraft.

On top of the offer, the CEO of Vivendi, Jean-Bernard Lévy, proposed to merge Vivendi Games with Activision on the condition of Vivendi keeping the majority stakes in the resultant company. Despite Kotick was concerned about his position in the new company, he knew that the merger would open new doors for it in the gaming industry. After proposing the same to the board of Activision, finally, on 9 July 2008, Vivendi and Activision together built Activision Blizzard. It was a US$18.9 billion deal, and Kotick was named the President as well as the CEO of the newly formed Activision Blizzard. Lévy holds the position of the Chairman of the company after replacing René Penisson. Even after the merger, the headquarters of the company remains in Monica, California, US.

Only after two years of its founding, the company became the largest video game publisher in the world. The company did not publish the titles under its name but used the name of its studios to release those titles. Call of Duty was the first and the most famous title published by Activision Blizzard. Almost all of its parts broke its own biggest launch records. The first part of the game was launched in 2009, and it grossed $310 million in a day.

In 2011, Activision Blizzard started its Skylanders franchise, the creators of Spyro’s Adventure. Activision paid a sum of $5.83 billion to the partner Vivendi and acquired 80% of the latter’s share in the company, bringing Vivendi to 11.8% of the ownership of Activision Blizzard. In 2016, Vivendi sold the rest of its shares to Activision, exiting from the partnership. This way, Activision took the company under its control completely.

The next famous title from Activision Blizzard was Destiny, released in September 2014. It broke the launch day sales record by bringing in over $500 million in retail sales on the first day of its launch. In November 2015, the company acquired the social gaming company King, the developer of the famous Candy Crush Saga. The company listed in Fortune 500 in June 2017.

Titles Published by Activision Blizzard

Call of Duty series, Crash Bandicoot series, Guitar Hero series,  Skylanders series, Spyro the Dragon series, Tony Hawk’s series, Diablo series, Hearthstone Heroes of the Storm, Overwatch StarCraft series, Warcraft series, and Candy Crush Saga, are some of the most in-demand titles by Activision Blizzard.

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The CEO: Robert A. Kotick

Robert A. Kotick is currently serving as the President and the CEO of the company. He was born in 1963 and is a native of the US. Kotick is a famous businessman, and it was from his childhood when he started to show the qualities of a businessman. He was in high school when he ran a business renting out Manhattan clubs on off nights.

In the early 80s, he joined the University of Michigan, where he studied Art History. He was still in college when he started a software development company called Arktronics. He became part of Activision when he and his partner Brian Kelly bought a 25% stake in Mediagenic (which later became Activision) in December 1990. The company was at the stage of bankruptcy at that time. Kotick is responsible for the restructuring of Mediagenic into Activision, and later, into Activision Blizzard.