Microsoft is pursuing its planned acquisition of video game giant Activision Blizzard in a deal valued at 69 billion dollars (approximately 62.7 billion euros), a development that a federal court in California ruled on Tuesday. The decision marks a setback for the Federal Trade Commission, which had urged the court to halt the merger pending full regulatory and judicial review.
The court dismissed the FTC’s argument that the combined entity would pose a significant risk to competition in video game subscriptions and online gaming markets, including potential harm related to popular franchises such as Call of Duty. The ruling allows Microsoft to move forward with the integration, bringing under its umbrella a portfolio that includes Call of Duty, World of Warcraft, and Diablo, ahead of the contractually scheduled closing date on July 18. [Bloomberg]
In response to the ruling, the United Kingdom’s competition regulator, the Competition and Markets Authority (CMA), along with Microsoft and Activision Blizzard, submitted a joint request to stay the appeal against the CMA’s decision to block the purchase. The parties argued that a stay would avoid delaying the transaction while concerns about competition in the video game market were addressed. [Bloomberg]
A CMA spokesperson indicated that the parties were open to restructuring the deal in ways that would satisfy the regulator’s final concerns, signaling a willingness to adapt the arrangement to preserve competitive dynamics in the sector. [Bloomberg]
Emergency plans
Regardless of the latest developments, Microsoft has signaled that it is prepared to pursue alternative routes, including the possibility of exiting Activision Blizzard from the United Kingdom to finalize a purchase elsewhere, should the UK regulatory environment prove insurmountable. Industry reports noted that the Mountain View company could continue pursuing the acquisition from outside the UK if necessary. [Bloomberg]
Earlier in the year, CMA officials communicated reservations about the proposed acquisition, expressing concerns that the deal could influence the future landscape of the market and potentially consolidate influence within streaming and related services. The interim CMA findings had already favored Sony in certain respects, suggesting that closing the deal could raise competition concerns in both console and cloud gaming sectors. [Bloomberg]