Benzinga - by Piero Cingari, Benzinga Staff Writer.
In a landmark move, Microsoft Corp. (NASDAQ:MSFT) has successfully completed its acquisition of gaming titan Activision Blizzard Inc. (NASDAQ:ATVI).
What Happened: As reported on Friday by CNBC, Microsoft’s acquisition of Activision Blizzard has been finalized.
This marks the most substantial deal in Microsoft’s 48-year history and comes after a positive verdict from U.S. regulators and the U.K.’s Competition and Markets Authority.
Microsoft has obtained the necessary approval by consenting to transfer Activision’s game streaming rights, including the renowned “Call of Duty,” to Ubisoft Entertainment (OTCPK: UBSFY).
The finalized deal guarantees that cloud gaming providers can utilize non-Windows operating systems for Activision content, alleviating the U.K. watchdog’s initial fears.
As per the SEC filing, as of Friday, each Activision Blizzard common stock share has been cancelled and automatically converted into an entitlement to receive $95 in cash.
With this acquisition, Activision Blizzard's portfolio of renowned video game franchises, such as Call of Duty, Diablo and Warcraft, will now be part of Microsoft’s enterprise. This move aligns with Microsoft CEO Satya Nadella‘s strategy to widen the company’s product range beyond its core business of operating systems and productivity software.
To pacify European regulators, Microsoft offered several concessions, including free licenses to stream Activision Blizzard games in the European Economic Area.
Furthermore, Microsoft entered agreements with console competitors Nintendo ADR (OTC:NTDOY) and Sony Group Corp (NYSE:SONY), ensuring them access to Call of Duty games for the next decade. Despite initial pushback, the acquisition received the green light, signaling a significant expansion of Microsoft’s presence in the gaming industry.
Why It Matters: Microsoft’s acquisition of Activision Blizzard marks a significant step in the tech titan’s expansion strategy into the gaming industry. Not only does this deal provide Microsoft with a robust portfolio of popular game franchises, but it also boosts its competitive edge in the gaming sector against rivals like Sony and Nintendo.
The deal also highlights the importance of gaming in Microsoft’s broader business strategy under CEO Nadella. Microsoft’s willingness to make concessions and strike deals with rivals illustrates its commitment to diversifying its offerings and growing its presence in the gaming market.
This landmark acquisition also underscores the ongoing consolidation in the gaming industry, with tech giants like Microsoft leveraging mergers and acquisitions to broaden their gaming portfolios and strengthen their market positions.
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