January 31, 2023 | Technology | North America | Ended
In January 2022, Microsoft announced that it would acquire Activision Blizzard, a game developer behind some of the world’s best-selling franchises, including Call of Duty, World of Warcraft, and Candy Crash, for $68.7bn. It is Microsoft’s largest acquisition to date, the biggest ever in the video game sector, and the price reflects the value of content in the industry. The merger comes with significant antitrust risks, however, and it is under in-depth investigations globally, including in the UK, Europe and the US, where the FTC has sued to block it. Investors are navigating uncertainty around the regulatory considerations and processes, and in this report, we weigh the key deal risks and ask whether the risk-reward of owning Activision is worth it. Microsoft has tried to frame the deal as unproblematic and a small piece of a much larger gaming market, but antitrust enforcers have honed in on Microsoft’s ability and incentive to foreclose competitors by restricting or degrading access to Activision’s content on ...
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