Microsoft's acquisition of Activision Blizzard isn't small, can't it be prevented?

Source: Microsoft official website

For $68.7 billion or more in cash, Microsoft on Tuesday abruptly launched its "financial muscle" to announce its acquisition of Activision Blizzard, which made many "not human" video game fans think. ."

The deal is not only the biggest acquisition since Microsoft's inception, but also the biggest acquisition in the global gaming industry to date.

Microsoft's acquisition of popular gaming company Activision Blizzard isn't small, but the merger will still be overseen by management. It's hard to say.

Microsoft Lub Gaming Ambitions

Microsoft's big deal was kept under wraps, with little wind until Tuesday. However, Microsoft's past intentions for games are still very clear.

Since the launch of the first generation Xbox game console in 2001, Microsoft has continued to invest in game consoles and game developers over the past 20 years.

After becoming CEO of Microsoft, Nadella pioneered the "buy, buy, buy" model and together acquired more than 10 game studios. For example, in September 2020, Microsoft acquired massive gaming giant ZeniMax for $7.5 billion. ZeniMax has partners such as Bethesda Game Studio, Tango Game Studio, and has developed games such as the Doom series and the Elder Scrolls series.

Microsoft believes gaming is now the most important and fastest way to entertain. Newzoo industry analysts estimate that the global sports industry generated total revenues of $180 billion last year and will reach $218.8 billion by 2024.

The acquisition of Activision Blizzard means something good for Microsoft. The exchange will bring the number of home theater companies to 30, securing the operating rights for all studios owned by Activision Blizzard and its King organization.

Microsoft also received popular IP games such as "Call of Duty", "Warcraft Series", "Overwatch", and "Candy Crush Saga".

If the deal goes through, Microsoft will become the world's third-largest gaming company by revenue, behind Tencent and Sony.

Although the industry generally views Sony's PlayStation as the leader in competition with Microsoft's Xbox, Microsoft has strengthened its reach in game consoles and game content after acquiring Activision Blizzard. .

Microsoft plans to release Activision Blizzard games on its Game Pass service. Game Pass now has over 25 million users and Microsoft expects Activision Blizzard to reach nearly 400 million monthly subscribers.

Anwarzad, an analyst at Asymmetric Advisors, said in a statement that Sony's predicament could worsen. Sony shares fell 12.8% in Tokyo trading on Wednesday.

Microsoft's acquisition of Activision Blizzard further bolsters its gaming capabilities, including the creation of metaverse layouts.

After the completion of the exchange, Microsoft will enjoy the benefit of the whole industry chain in the areas of mobile phones, PCs, game consoles, game production and distribution, and games. in cloud. Nadella said gaming is the most fun and exciting feature on any platform today and will play a key role in transforming the Metaverse platform.

Bernstein analyst Mordrer sees Microsoft as the biggest winner in the Metaverse, where it will not only play software games, but also key processes, including hardware and cloud.

Microsoft provides everything needed to deliver its Metaverse platform, including its Azure cloud computing platform, the latest mix of HoloLens headsets, Game Pass for gaming, and the xCloud cloud gaming service. The main features are in place, the model says.

Photo by Matthew Manuel via Unsplash

Can Antitrust End?

The massive acquisition of Microsoft will replace the competitive game, and the metaverse is also a major event that has paid off for everyone in the market.

Microsoft expects the change to complete in 2023, based on management review and member approval by Activision Blizzard. Especially on the management side, Microsoft has not emphasized US anti-trust laws in the past, but this deal will face even bigger issues.

According to CNBC, those who spoke in the case said the investment and mergers and acquisitions showed great promise after learning that Apple, Amazon, Google and Facebook had been investigated. We approach large purchases with caution as we maintain our control and expand our search space.

As competitors struggle to trust search, Microsoft has taken a "buy, buy, buy" approach, such as acquiring software development platform GitHub for $7.5 billion. dollars in 2018 and the announcement of a deal worth around $16 billion. 2021. Acquisition of software company Nuance.

Source: Microsoft official website

Nadella has previously said that while Microsoft leverages technology to secure all your data without the hassle of sharing, competitors use linked or creative users.

Microsoft also has great confidence in this agreement. "Microsoft will continue to lag rivals Tencent and Sony in revenue, and mobile phones remain the world's most important gaming device," said Spencer, Microsoft's chief gaming officer. no,” he said.

Spencer said the deal will help Microsoft compensate the mobile platform for handling game distribution.

Microsoft will pay Activision Blizzard $3 billion "costs involved" if the deal goes through, according to Reuters, an eyewitness said.

But just hours after Microsoft announced its governing body, the Federal Bureau of Investigation and the Federal Bureau of Investigation (FTC) said they would review government action instructions to review the joint. The FTC and the United States Department of Justice work together to protect trust and identify liabilities for joint ventures and purchase inspections.

“The recent actions of US antitrust organizations and the lack of experience of regulators in other countries like the European Union and the United Kingdom may show that these organizations will review this agreement.”

Betty, an analyst with security firm Elevation, said the research could focus on whether the integration of Activision Blizzard's game portfolio with Microsoft's console and hardware systems is a monopoly. Betty hopes the swap will be approved by US, European and Chinese authorities.

Questions management will raise include whether Microsoft, a member of Activision Blizzard, could create unfair competition for its main rivals in gaming hardware. The deal, which allows Microsoft to bring exclusive content to the Xbox console, could force consumers to choose Xbox over Sony PlayStation and Nintendo Switch. For example, Activision Blizzard's "Call of Duty" series of games, now available on consoles from all three companies, will continue.

According to Barron's, given the potential counter-draw, Wall Street merger arbitrageurs have found less than a 60% chance of winning.

Activision Blizzard shares rose 25.88% on Tuesday to $82.31, less than Microsoft's $95. If Wall Street trusts the deal, Activision Blizzard products could fetch as much as $95.

Other tech companies are also waiting for Microsoft's research to "take a closer look," and those mentioned in the issue asked Google, Meta and other companies if this could be the case with the energy that has eventually lured Microsoft into the company they owned. Bloomberg, he speaks for himself. In recent years has been involved in combat research.

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This article first appeared at https://www.bloomberg.com/news/articles/2022-01-18/microsoft-s-activision-deal-set-to-test-biden-s-antitrust- diet

This article first appeared on https://cn.reuters.com/article/sony-shares-plunge-0119-wedn-idCNKBS2JT08D?il=0

This article was first published at https://www.barrons.com/articles/microsoft-stock-activision-blizzard-deal-metaverse-51642522838