Activision-Blizzard Merger and its Meaning for You

On January 18th, 2022, the entertainment industry was shaken. The enormous companies Activision and Activision Blizzard were bought by another giant, Microsoft for over $68 billion dollars. This deal has stirred up some drama, as Microsoft’s competitors believe it could cause a monopoly. The FTC is now attempting to block this deal, sharing other competitors' fears of the industry becoming very one-sided.

But why is this deal happening? What could make this a monopoly? Why do so many corporations want this blocked? That will all be explained shortly.

When the deal was first struck in January, the merger of the companies was expected to be completed by Spring of 2023. The merger would give Microsoft control of properties such as Warcraft, Spyro, Diablo, and Candy Crush. If this deal went through, it would be among one of the biggest company purchases of all time. However, as you know, it did not go through. 

The Federal Trade Commission and the European Commission, also known as the FTC and EC respectively, blocked the deal, and are currently trying to prevent it from going through. As stated earlier, this is because the FTC and EC believe a monopoly, or absence of competition, would be made. 

The purchase of Activision Blizzard was made for a couple of prominent reasons. The first of these is being able to compete with the humongous Chinese corporation, Tencent.

Tencent, known for owning some of the world’s biggest companies, has recently been gaining power. Enough power that it could overtake Microsoft in terms of profits.

To oppose this, Microsoft bought Activision-Blizzard to be able to stop a Tencent-Monopoly being created.

Ironically, by trying to oppose a monopoly, Microsoft has only started to create a monopoly of their own.

Another reason Microsoft bought activision was because of its wide varieties of IP’s, or individual properties, that Activision-Blizzard owns. With over 500 million active consumers of activision products, a very large profit could be made, especially with a more competent company in charge now.

Now, the main reason competitors like Sony want this deal blocked isn’t just because of the feared monopoly. It is because they are afraid of losing valuable properties, as Microsoft may make large titles exclusive to their own products.

As well as attempting to block the deal, Sony Interactive Entertainment bought another company to try and keep up with the merger.

On July 15th, 2022, Sony announced that they have officially bought Bungie, creator of the Halo and  the Destiny series respectively, for a bid of $3.6 billion dollars.

Now with all these acquisitions out of the way, one question remains. How will this affect you?

If the Activision Blizzard merge goes through, if you are using any non-Microsoft products, you may not be able to use any more Activision properties, as it is likely for them to become exclusive to Microsoft’s own products.

You should also see the quality in Activision properties go up, due to having over $60 billion more dollars to use.

Other than those two changes, there is very little that will affect you. 

All in all, those are the basics of the Microsoft-Activision merger. Now, you are informed on the basics of this deal, why it is happening, and what it means for you.

If you have any comments, questions, or criticisms, feel free to email me.

Source: https://www.wsj.com/articles/activision-blizzard-microsoft-deal-11642557922

 Source:https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-seeks-block-microsoft-corps-acquisition-activision-blizzard-inc