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Business News/ Companies / News/  Microsoft-Activision acquisition: What will change after the biggest-ever gaming industry merger?
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Microsoft-Activision acquisition: What will change after the biggest-ever gaming industry merger?

Microsoft completed its $69 billion acquisition of Activision Blizzard on Friday. The deal will help the firm in expanding its presence in gaming market

FILE PHOTO: Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard's games characters in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/File Photo (REUTERS)Premium
FILE PHOTO: Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard's games characters in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/File Photo (REUTERS)

Microsoft-Activision Blizzard deal: In a historic deal in the gaming industry, Microsoft sealed its $69 billion acquisition for Activision Blizzard on Friday. Earlier in the day, the Xbox maker got the final approval from the Britain's competition watchdog

The approval reversed its earlier decision to block the merger and paved way for the last transaction in the acquisition. With this, Microsoft completed the biggest ever acquisition of the gaming world. The completion will be a major catalyst for the US tech firm to attract more people to its Xbox consoles and Game Pass subscription service. Here are some possible impacts of the deal on gaming industry.

Also Read: Microsoft faces Federal Trade Commission's push for injunction to halt Activision Blizzard acquisition 

Rise of a new gaming industry kingpin

Until today, Activision Blizzard enjoyed the title of being the largest game publisher in North America. Other than its hugely popular game “Call of Duty", the company also offers “World of Warcraft" “Diablo," and “Overwatch." The company also owned King, the firm behind “Candy Crush".

Addition of all these games in Microsoft's kitty of “Halo" and “Forza" would expand Microsoft presence in the gaming industry exponentially. 

With this Microsoft will end up being the third-largest gaming firm by global revenue behind Tencent and Sony, reported yahoofinance.

Powerful gaming studio

The acquisition will make way for Microsoft to own all the developers under the Activision Blizzard company, from Activision Publishing to King. 

Microsoft will now own all the developers under the Activision Blizzard company, including teams at Activision Publishing, Blizzard Entertainment, and King. The acquisition encompasses the following subsidiaries as well: Treyarch, Raven Software, Sledgehammer Games, , Beenox, Toys for Bob, Activision Shanghai Studio, etc.

Exclusivity of Xbox

During the Federal trade Commission's (FTC) trial, the most pressing issue was the exclusivity of Call of Duty after the acquisition. However, Microsoft, in July, had announced that it will launch new Call of Duty games across PC, PlayStation 4, PS5, Xbox One, and Xbox Series X/S.

Notably, Micorosft's commitment to bring Activision Blizzard games to all platforms was limited to Call of Duty only. Which means there is a possibility that Microsoft make Activision's other franchises like Diablo, Overwatch, Crash Bandicoot, and Spyro exclusive to Xbox. 

Boost to Microsoft's presence in mobile gaming

The deal would significantly benefit Microsoft to build its presence in the mobile gaming industry. Till March 2023, Activision Blizzard enjoyed a 368 million of monthly active users base, reported yahoofinance's Daniel Howley. In the first quarter of 2023, the company reported a consolidated revenue of $2.4 billion. A major chunk of its revenue, ie $956 million came from mobile. Activision's stronghold in mobile gaming will ultimately benefit Microsoft's growth in the segment.

Change in Sony's strategy to rule the gaming world

The mega-merger will bring Microsoft in direct competition with Sony. The acquisition will exert pressure on Sony to change its strategy to maintain its dominance in the market.

“Historically, Sony would have twice the market share of Microsoft at all times. And so now with this acquisition, on a revenue basis they're the same size," NYU Stern School of Business professor Joost van Dreunen told yahoofinance.

The company is already striving to bring more live services games. However, the industry experts believe that Sony needs to intensively boost its live service game catalogue to compete against the new industry leader.

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Published: 13 Oct 2023, 11:26 PM IST
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