New business Activision Blizzard takeover: Microsoft facing a historic cancellation?
Announced nearly a year ago, the takeover agreement between Microsoft and Activision Blizzard has still not been finalized. For several months, the deal has encountered turbulence and could end up as one of the most resounding financial failures in the history of video games. In the industry, there are several examples of failed mergers (like SEGA and Bandai in 1997), but none have ever had such a resonance. This time, the agreement faces a wall: the American competition authority. Just that.
Will the deal between Activision Blizzard and Microsoft turn into a fiasco? This is the question that we can ask ourselves since the FTC (Federal Trade Commission), in other words the competition regulator in the United States, declared its intention to oppose the purchase of 69 billion. The independent agency believes that this merger may allow Microsoft to harm competition by obtaining control of leading franchises. To provide clarification, the FTC echoes Microsoft’s previous takeover. By acquiring Zenimax Media, which owns Bethesda Softworks, the Redmond firm has taken exclusive control of Starfield and Redfall, in contradiction with the intentions initially displayed. And for many organizations, there is no doubt that Microsoft will not hesitate to swallow the biggest licenses.
Europe is no exception. Like the FTC, Brussels has opened an investigation into the takeover of Activision Blizzard by Microsoft. According to the European Commission, such a strategy could lead to a rise in price, a drop in quality and a reduction in innovation “, in short, an advantageous hegemony for the players. And this, both on games, subscriptions or cloud gaming. Identical voices are beginning to rise everywhere against this takeover and we are probably not at the end of our surprises. Even though Europe’s competition regulator toned down its statement by telling the FTC that Microsoft never made a commitment to the EU not to release Xbox-exclusive content following its takeover of Zenimax Media, the deal is still poorly filed. From there to completely failed?
Activision Blizzard: Microsoft has not said its last word
Brad Smith, president of Microsoft, reacted to the American media The Verge. In his statement, in addition to the fact that he is convinced of the interest of the agreement for the players and the developers, he underlines that the company has complete confidence in this file and that it will be happy to defend it. here in court. The reason ? Unlike its counterparts across the Atlantic, the FTC has filed a complaint with the Administrative Court and intends to do everything to block this takeover.
For the moment, observers, like journalists from the Axios site, felt that this complaint (a first for Microsoft in twenty years) did not yet threaten the operation. For the time being, it is more of a “slowdown” and Microsoft has assets to defend itself. Nevertheless, the deal takes time to be finalized and this situation could, in the long term, annoy the shareholders of the American giant. We are therefore not at the end of this affair, especially since the decision of the European Commission should not intervene before, at the very least, March 2023.