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THE GAME OF ACQUISITION: MUCH HARDER, MORE UNCERTAIN – The Microsoft and Activision Blizzard Tale

Updated: Aug 7, 2023

In what would make history as either the largest acquisition in the gaming industry or the hottest gist on the gaming bloc, the January 18, 2022, official announcement by Microsoft[1] of its intention to acquire Activision Blizzard, a leader in the game development space has set the business world on the edge. This deal worth about US$69 billion is set to make Microsoft become the world’s third largest gaming company by revenue, behind Tencent and Sony. For Microsoft, the proposed acquisition will give gamers access to "more games on more devices including Xbox, PlayStation, phones, and online" and game developers will have access to more players, more investment and improved revenue as well.[2]

Given the deal’s international scope, it is mandatory that regulators in each country where the companies have a significant business presence must scrutinize the deal and either move or block it using different assessment parameters. To complete this path, the companies must get approvals from the regulators of the EU, UK, and U.S.A. in addition to several other countries. The recent EU approval of this deal comes as a beam of hope with the commission citing that its analysis showed the deal wouldn’t hurt competition after Microsoft vowed to let cloud rivals offer blockbuster titles such as Call of Duty on their own platforms for 10 years.[3] Despite this celebrated feat, the companies still have an uphill task to win the hearts of the U.S. and U.K. regulators which is proving herculean. The crux of the resistance from these unwilling regulators are premised on the assumption that the proposed acquisition would give Microsoft "far-outsized market power in the video game industry," with the means and motive to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition on the emerging cloud gaming industry.[4]

While noting the valid points on both sides of the coin, a valid concern is whether regulators aggressive opposition to mergers has made businesses more competitive in the global economy? Mergers and acquisitions can enable companies to invest more in better model innovations, serve their customers better, and gain global market share and enjoy larger economies of scale. But antitrust enforcers claim their aggressive policies protect startups from predatory acquisitions by larger firms.[5] The truth is that startups suffer when acquisitions are squelched. In 2019 about 90% of high-growth startups used acquisition as their exit strategy. The other 10% had initial public offerings. In the 1980s the ratio was reversed: 10% acquisitions to 90% IPOs.[6] Nonetheless, enforcers now embrace the myth that the startup economy is hobbled by "killer acquisitions" in which large companies buy small ones to snuff out potential competitors, drying up venture capital in the process. The opposite is true. The prospect of acquisitions by large companies enables commercialization of innovations and attracts investment capital.[7]

The tale of Microsoft and Activision highlights the increasingly complex, conflicting web of multinational merger reviews and most importantly accentuates the almost inevitable impact of external considerations (regulatory approvals) in determining the shape of business relations. Hence, whilst business owners have control of their business activities certain decisions that affect the public (acquisitions in this case) must be subject to a higher level of control notwithstanding the mutuality and consent of relevant parties involved.

[2] Adrain Willings: “Microsoft says its Activision Blizzard acquisition will benefit players” October 4, 2022. Available on

[3] Samuel Stolton, “ Microsoft’s $69 Billion Activision Deal Wins EU Approval (3)” May 15, 2023. Available on

[4] Microsoft-Activision deal: Gamers sue to stop merger. Available on

[5] Robert D. Atkinson: “Killing Mergers Hurts America's Global Competitiveness- Microsoft buying Activision would help the firm compete with Japan's Sony and Nintendo.” May 17, 2023. Available on

[6] See note 5.

[7] ibid

By Sotonye Cynthia Belonwu

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