Filed on Wednesday, the United Kingdom's Competition and Markets Authority (CMA) opened an investigation into the $68.7 billion acquisition of Activision Blizzard headed by Microsoft. The merger inquiry is considering whether the buyout could potentially diminish competition in the UK and if the transaction "will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002."
Thus far, the investigation sits in Phase 1, wherein the CMA will await comments made via third parties up until July 20 as it continues its own investigation. The deadline for its final decision is set for Sept. 1. The CMA also explained via a statement that its investigation into the Microsoft Activision Blizzard acquisition will "consider whether the deal could harm competition and lead to worse outcomes for consumers - for example, through higher prices, lower quality, or reduced choice."
The Microsoft Activision deal first made headlines in January when the firm announced it would be acquiring the gaming publisher at $95 a share in an all-cash transaction. Alongside its previous pick up of Bethesda in 2021, the buyout heralded not only the newfound push of consolidation within the gaming industry, witnessed via the likes of Take-Two Interactive's purchase of Zynga and Sony's acquisition of Bungie, but also fears that too much control would be levied to Microsoft upon the deal's close.
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Activision Blizzard, often abbreviated to ActiBliz, accounts for a wide parcel within the $190 billion gaming industry, represented by heavy-hitters in IP like Call of Duty, Overwatch, World of Warcraft, and Candy Crush, to name but a few. Along with a wide array of IP under its guise, the video game publisher has also been at the forefront of several major controversies, most prominent among them being detestable working conditions and poor management led by ActiBliz CEO Bobby Kotick.
In the United States, Microsoft's acquisition is still being reviewed by the likes of the Federal Trade Commission (FTC). The Communications Workers of America (CWA) would later support the $68.7 billion deal following a labor neutrality agreement with Microsoft made in June. In May, amid an interview with Belgium's L'Echo, Microsoft's president and vice chairman Brad Smith explained that the merger was "moving fast, at least fast enough for an acquisition of this size."
Despite some seeming setbacks and the underlying controversies surrounding ActiBliz, it's more than likely the deal will eventually go through, at least according to Berkshire Hathaway's Warren Buffet, who has scooped up a ton of Activision Blizzard stock both before and in the wake of the deal's announcement. Other analysts aren't so keen, as the deal is a markedly large one in comparison to previous acquisitions in the past, not to mention the weight it allots to Microsoft in its finalization.
If the deal does end up going through, it would push Microsoft to the third tier on the list of the world's largest video game companies, stealing Apple's spot under Sony and Tencent. Of major importance to the tech, the conglomerate is ActiBlizz's ownership of King, the mobile gaming giant behind some of the biggest titles on smartphones. In 2021 alone, the global mobile gaming market was worth $131 billion, making the space highly lucrative for Microsoft to expand upon.
