Activision was the world's first ‘third-party’ game developer, creating and publishing games for other firms in the gaming platform.
Fast forward 43 years, the very business, now ‘Activision Blizzard,’ has been purchased by Microsoft, one of the industry's major platform owners, for a whopping USD 68.7 billion—the greatest sale in the video game industry's history.
This massive acquisition will ensure Microsoft’s exclusive access to Activision’s massive library of games, including many world-famous titles such as Call of Duty, World of Warcraft, Diablo, and Candy Crush.
Microsoft has made a number of high-profile acquisitions in the previous decade, including Minecraft's creator Mojang for USD 2.5 billion in 2014 and Doom’s publisher 'ZeniMax' for USD 7.5 billion in 2020. With the acquisition of Activision Blizzard, Microsoft has become the third-largest company in the gaming industry.
This is all part of Microsoft's current video game business plan, which focuses on expanding subscriptions to its Game Pass service rather than selling games.
Game Pass, like Netflix and Spotify, allows customers to access a large digital library of games in exchange for a monthly charge.
But this has raised eyebrows all over the gaming industry. In her 2015 book ‘Global Games,’ researcher Aphra Kerr estimated that the biggest 10 gaming companies kept 49 per cent of the total revenue generated by the industry.
And now this recent acquisition will make the already heavily concentrated gaming industry even denser, potentially allowing big companies to yield monopoly power, which is never good news for any industry.
The company could make these properties exclusive to Game Pass if it wanted to, driving customers away from competing systems like PlayStation and distribution sites like Steam.
To put it another way, it has the potential to draw customers into its gaming ecosystem, and this will give them free reign to charge higher subscription prices.
For PlayStation and Mac users, the situation might become more serious and they might be forced to purchase a PC or an Xbox if they want to play future installments of these titles.
All of these possibilities along with this hugely expensive acquisition have already drawn the attention of the antitrust regulators.
Microsoft's big acquisition of Activision Blizzard may face a lengthy regulatory process. According to Bloomberg, the acquisition will be reviewed by the Federal Trade Commission rather than the Justice Department.
While both of these US regulatory authorities are in charge of assessing mergers, the FTC will take the lead in this instance.
The Federal Trade Commission and the Department of Justice have both promised to be tougher on big tech to prevent monopoly.
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