Microsoft’s Deal to Acquire Activision Blizzard to Be Reviewed by FTC
Steven Higgins
Finance Writer
Major technology and gaming company Microsoft, known for manufacturing the Xbox gaming console, caught the attention of many in the gaming industry when they announced that they would be acquiring Activision Blizzard for a whopping total of nearly 69 billion dollars, making the buyout the largest in the history of the games industry. The terms of the all-cash sale, which is expected to be processed in the fiscal year 2023, will have Microsoft paying $95 per share to acquire Activision Blizzard, which is already the seventh-largest game publisher by revenue. The agreement will also jump Microsoft into the top three gaming companies in the world by revenue. Activision Blizzard is a video game company that produces a wide variety of popular games such as Call of Duty, Overwatch, World of Warcraft, and Candy Crush. The huge announcement came after a series of sexual harassment and gender-based discrimination cases within the company were released to the general public, leading to a public walkout of employees and numerous resignations within the company.
However, the massive acquisition has been met by the opposition and antitrust review of the Federal Trade Commission (FTC). The FTC is going to investigate if Microsoft’s purchase of Activision will cause harm to its competitors such as rival technology company Sony. The FTC Regulators are likely to closely investigate the dangerous potential of the combination of Microsoft consoles and hardware systems with the wide gaming selection that Activision produces and the possible harm of Microsoft limiting their competitions access to the games that were previously mentioned. FTC chairperson Lina Khan has a long track record of being an advocate for stricter reviews of merges such as this deal, especially when it is dealt with by large technology companies such as Microsoft. She believes that these companies are able to leverage their dominance in the sector of business to gain power in other markets. Since Khan was appointed as chair of the FTC in June of 2021, the antitrust agency has sued to block two major takeovers. Nvidia Corporations proposed purchase of Arm Ltd. and Lockheed Martin Corporations’ deal to buy Aerojet Rocketdyne Holdings Inc. The blocking of these previous deals could be bad news for Microsoft and Activision’s proposed merger deal as it could potentially be met by a similar opposition from Khan and the FTC. The review of the deal is definitely something worth monitoring, especially if you are interested in gaming due to the potential implications the merger could create if it passes through the Federal Trade Commission’s examination process.
Contact Steven at steven.higgins@shu.edu