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Microsoft Signs Contract with Gaming Giant Activision Blizzard

Microsoft Signs Contract with Activision Blizzard

The deadline for concluding their acquisition agreement has been extended, according to Microsoft and Activision Blizzard (Act. Blizz.). The initial due date was July 18, 2023; however, it has already been moved up to October 18.

This extension gives extra time to address legal issues and win the British Competition and Markets Authority’s (CMA) blessing. The governments of 39 countries have so far approved the partnership between the two businesses. Let’s examine some of the deal’s specifics.

Backgroung

In January 2023, Act. Blizz, one of the biggest publishers of video games, and Microsoft, a major computer business, announced they will merge. The $69 billion merger intends to combine Act. Blizz’s extensive collection of well-known gaming brands with Microsoft’s capabilities in technology and cloud services. The CMA is the biggest obstacle to the deal, despite the fact that it has received the approval of 39 countries so far. Remember that the CMA rejected the agreement in April because it was concerned about the market for cloud gaming losing competition.

Deadline Extension

Act and Microsoft both agree that the deadline should be extended to October 18. Blizz. keeps navigating the legal system and responding to any issues brought up by the CMA. This delay gives adequate time for further discussion to guarantee a successful deal closure.

On Monday, the CMA reported having a “productive” discussion with Microsoft about potential solutions. But the CMA has not yet changed its position about the veto. The CMA has extended the deadline for publishing a final judgement until August 29. On the UK side, negotiations are proceeding but will take days or even weeks.

Regulatory Scrutiny

The Microsoft and Activision Blizzard deal has come under intense regulatory scrutiny. Protecting consumer interests and promoting fair competition are the responsibilities of regulatory authorities. Microsoft is confident that the postponed deadline will provide them more time to resolve the outstanding legal challenges. Additionally, it will have enough time to handle any potential issues.

The agreement between the two businesses has run into a number of problems that are preventing it from being completed. These are a few of the problems they have encountered.

1. Regulatory Scrutiny

The Microsoft and Activision Blizzard deal has come under intense regulatory scrutiny. At one time, the US Federal Trade Commission (FTC) attempted to have the purchase blocked in court. Regulators in the UK and the EU have also closely examined the agreement. The EU has since changed its position, but the UK is steadfast. Regulating bodies’ main and specific worry is that the deal would stifle competition in the cloud gaming industry.

2. Competition Issues

The FTC is worried that the agreement could allow Microsoft to lower the quality of Activision’s games or the player experience on competing platforms like Nintendo and Sony’s PlayStation. It thinks that doing this will enable the business to manipulate prices or alter the conditions and timing of content access.

3. Sony’s Concerns

Last month, Microsoft presented Sony with a 10-year contract for new Call of Duty titles. Sony hasn’t yet accepted the offer, though. However, Nintendo and Valve reached a similar agreement. If the Act. Blizz. deal is successful, Call of Duty may come to Nintendo platforms. Microsoft is currently exerting every effort to get Sony to negotiate a deal.

4. Legal issues

Microsoft went to court over the arrangement with the FTC. In order to keep the deal from closing while the agency continues to investigate the specifics, the FTC has petitioned a judge for a temporary order.

Gaming Industry Implications

The gambling industry will be significantly impacted by the merger. The resources of Microsoft combined with Act. Blizz’s massive portfolio of well-known gaming titles, like as Candy Crush, World of Warcraft, and Call of Duty, have the potential to completely change the game industry. The combined company can improve players’ gaming experiences by utilizing Microsoft’s cloud services and technology. Additionally, it might bring in fresh developments for the sector. The merger may also result in more cooperation and competition in the gaming industry. Both developers and players will profit from this.

Last Words

The deadline for concluding the Microsoft-Activision Blizzard merger transaction has been extended to October 18 in order to give more time for negotiations and regulatory procedures. This prolongation enables both businesses to address any issues brought up by the UK regulator and work toward the merger’s successful conclusion. By merging Microsoft’s technological know-how with Activision Blizzard’s well-known gaming properties, the Microsoft and Activision Blizzard combination has the potential to completely transform the gaming business. This merger may result in fresh ideas and better gaming experiences for users. The gaming industry is eagerly awaiting the conclusion of this big contract as the deadline draws near.


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