Activision Blizzard announced on Wednesday that the deadline for the completion of its $69 billion (roughly Rs. 5,66,200 crore) acquisition by Microsoft has been extended to October 18. This extension is necessary as the two companies are working together to obtain approval from the United Kingdom’s antitrust authority.
In addition to the deadline extension, Activision Blizzard revealed that the deal termination fee has been increased to $3.5 billion (roughly Rs. 28,700 crore) from $3 billion (roughly Rs. 24,600 crore) if the acquisition fails to close by August 29. After September 15, the fee will rise even further to $4.5 billion (roughly Rs. 36,900 crore).
Initially, the two US companies had agreed to finalize the deal by July 18. However, regulatory hurdles in the US and the UK have caused delays. The US Federal Trade Commission (FTC) twice attempted to halt the deal temporarily but was unsuccessful. Meanwhile, the UK’s Competition and Markets Authority (CMA) initially opposed the deal but reversed its decision after the US court ruling, extending its deadline for a final ruling to August 29.
Both regulatory bodies have expressed concerns about the acquisition. The FTC is worried that Microsoft may impair Activision’s game quality and player experience on rival consoles like Nintendo and Sony Group’s PlayStation. They also fear possible manipulation of pricing or changes to terms and timing of access to Activision content. The CMA, on the other hand, is concerned about the potential impact on competition in the cloud gaming industry, specifically in regards to users being able to play on any device using subscriptions like the Xbox Game Pass.
Microsoft has responded to these concerns by offering 10-year licensing deals to its competitors after the acquisition is complete. Their latest agreement is with Sony Group, ensuring that “Call of Duty” will continue to be available on PlayStation, which is Microsoft’s biggest competitor in the gaming console market.
In conclusion, the acquisition between Activision Blizzard and Microsoft has faced regulatory challenges, leading to an extension of the deadline. Both companies are working towards obtaining approval from the UK’s antitrust authority. Despite concerns raised by the FTC and the CMA, Microsoft is offering licensing deals to address competition issues.
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Eugen Boglaru is an AI aficionado covering the fascinating and rapidly advancing field of Artificial Intelligence. From machine learning breakthroughs to ethical considerations, Eugen provides readers with a deep dive into the world of AI, demystifying complex concepts and exploring the transformative impact of intelligent technologies.
