The U.S. Ninth Circuit Court of Appeals has denied the Federal Trade Commission’s final request to pause Microsoft’s takeover of Activision Blizzard, likely paving the way for the biggest-ever merger in gaming to finally move forward after a more than year-long regulatory saga.
The Open World Racing Game That’s Been Gone For A Decade Is Coming Back
The FTC had sought to have the acquisition kept on hold ahead of a July 18 deadline while appealing a ruling from the Northern District of California that sided with Microsoft. It was the antitrust agency’s last chance to stop the historic $69 billion merger that would see major gaming franchises like Call of Duty, World of Warcraft, and Candy Crush all become an extension of Xbox.
Regulators argued that the federal court had ignored evidence that Microsoft would have reasonable incentive to potentially make those franchises exclusives to its console and cloud gaming platforms in order to corner the market. Microsoft in turn blamed the FTC for using delay tactics and underselling a massive $3 billion breakup fee Microsoft would have to pay to Activision if the deal ended up not going through for some reason.
The Ninth Circuit will still handle that appeal, but denied the FTC’s motion to block the merger until that ruling was made, giving Microsoft the greenlight to close its deal on July 17.
It’s been a long journey up to this point, full of twists and turns, including abroad in the UK, the only country to block the deal so far. That country’s Competition and Markets Authority (CMA) had denied the merger on the grounds that it would give Microsoft too much of an advantage in the nascent market of cloud gaming.
Following the FTC’s initial court defeat earlier this week, however, the CMA announced it was back negotiating with Microsoft over new ways to resolve the antitrust conflicts. It’s now extended its final deadline for approval of the deal into August, suggesting it’s prepared to accept the tech giant’s latest concessions.
While nothing’s final until it’s final, it now looks like Microsoft’s shocking acquisition of one of the biggest game publishers in the world is about to become a reality, and will soon have the potential to completely reshape the video gaming landscape in the process. Or maybe Xbox owners will just get a bunch more free games on Game Pass. Time will tell.
Microsoft and Sony have finally reached a deal for keeping Call of Duty on PlayStation once the Activision Blizzard merger goes through. The surprise agreement comes after months of fighting between the two companies and is a sign the acquisition is all but inevitable.
Thank You, PS Plus, For Making My Backlog Even Bigger
“We are pleased to announce that Microsoft and PlayStation have signed a binding agreement to keep Call of Duty on PlayStation following the acquisition of Activision Blizzard,” Microsoft Gaming CEO Phil Spencer tweeted on July 16. “We look forward to a future where players globally have more choice to play their favorite games.”
It’s not immediately clear what the terms of that agreement are, and whether they are similar to proposals Microsoft recently signed with Nintendo and other cloud gaming providers. In the past, Sony has paid Activision for special benefits relating to Call of Duty, including timed-exclusive content and special marketing rights. It was also revealed during the recent court battle over the deal that Activision had leveraged its partnership with Sony to negotiate better commission rates for the franchise on Xbox.
Read More:Sony Won’t Share PS6 Info With Call Of Duty Devs If Owned By Microsoft
Sony had been vigorously contesting Microsoft’s planned acquisition of the publisher in regulatory proceedings across Europe, the UK, and the U.S. After the recent legal defeat of the Federal Trade Commission’s attempt to block the deal, however, the PlayStation 5 maker seems to have decided it’s time to settle. Sony Interactive Entertainment CEO Jim Ryan had reportedly said in the past that his only interest was in blocking the deal.
Sony’s current agreement with Activision wasn’t set to expire until 2025, and the new agreement seems likely to carry through for at least the rest of the PS5’s life. Microosft has claimed all along that it’s not in its financial interest to make the series exclusive as the games generate billions in revenue on the competing platform.
Microsoft declined to comment. Sony did not immediately respond.
Embracer Group, the Swedish holding company that’s been buying up everything from Borderlands maker Gearbox Entertainment to the rights to The Lord of the Rings, saw its stock plummet earlier this year when a mystery $2 billion deal collapsed at the last minute. Axios now reports that the partner who walked away wasn’t Microsoft or Sony: It was Savvy Games Group, backed by the controversial Saudi Arabia Public Investment Fund (PIF) led by crown prince Mohammed bin Salman.
Saudi Arabia Buys $1 Billion Stake In Publisher That Owns Many Of Your Favorite Games
“Late last night, we were informed that one major strategic partnership that has been negotiated for seven months will not materialize,” Embracer CEO Lars Wingefors told investors in a May 24 quarterly earnings press release. He added that if the deal had ended up going through, it would have “set a new benchmark for the gaming industry.”
But Wingefors never named the company that had walked away from the $2 billion verbal agreement. The size of it left only a few likely players, including Microsoft and Sony, which have been locked in a race to secure exclusives for the PlayStation 5 and Xbox Series X/S. U.S. tech giants like Netflix and Amazon, as well as Chinese conglomerates NetEase and Tencent, were also possibilities.
According to four sources who spoke with Axios, as well as documentation it reviewed, it was actually the Saudi Public Investment Fund gaming subsidiary, Savvy Games Group, that backed out. Led by CEO Brian Ward, a longtime gaming industry exec who worked at both Activision Blizzard and Electronic Arts, Savvy Games Group has been vocal about its aspirations to turn Saudi Arabia into a new gaming hub, with studios on the ground building the next generation of big hits. It’s still unclear why Savvy eventually walked away from the deal.
Embracer had already received a $1 billion investment from the Public Investment Fund last year. It and other big gaming companies like Electronic Arts and Nintendo have all drawn criticism for accepting investments from the Saudi Investment Fund because of the country’s established track record of human rights abuses. It’s unclear if Embracer’s failure to close the deal was complicated by ethical concerns or logistical issues.
Embracer Group and Savvy Games Group did not immediately respond to requests for comment.
Mortal Kombat 1 has only been out for a few days.Diablo IV is barely a few months old. And Pikmin 4 and The Legend of Zelda: Tears of the Kingdom are Nintendo games, so they rarely go on sale. But right now on QVC—yes, that old shopping network—you can get any of these games for $40 thanks to a deal for new customers.
The Week In Games: What’s Coming Out Beyond Mortal Kombat 1
I won’t bore you with my stories of watching QVC—a home shopping channel launched in 1986—whenever I need something in the background while playing mobile games or building Lego sets. But I don’t need to explain that most people reading this site likely don’t think of QVC when they think of “Places to buy video games.” Yet QVC does sell video games! And right now you can get a bunch of new and old games for either $20 or $30 off, depending on the price of the game.
Before we begin, you’ll need to create a QVC account. (And you’ll need to be a new member and this will need to be your first order for this deal to work.) Then pick out a video game and toss it in your cart. Then apply one of these two discount codes:
NEWQVC30: $30 off your first order of $60 or more.
NEWQVC20: $20 off your first order of $40 or more.
You can’t combine these deals, but with the $30 off coupon, you can grab any $60 or $70 game and knock a large chunk off its price. And while QVC doesn’t have a huge selection of games compared to Amazon or Gamestop, the shopping network does offer some new, AAA hits, like Diablo IV, Mortal Kombat 1, The Legend of Zelda: Tears of the Kingdom, Ride 5, Pikmin 4, Madden NFL 24, Immortals of Aveum, Street Fighter 6, God of War Ragnarok,and Watch Dogs Legion.
Any of these games (or other games) will work with either discount code. In fact, any item on QVC can be purchased with either discount. The key is that your cart needs to have $60 or more in it so you can save $30. Or $40 or more in it to use the $20 promo code. QVC says these codes will only last for a limited time, so don’t wait around if you want to grab any of these games for less than their full price.
Now, before I leave you, let’s check out that time an air mattress failed after the hosts stood on it with heels. Or what about that time a caller got very angry on air when someone interrupted their phone call? Or when a guest got too excited about consumerism and fell off the stage, hurting his “booty” in the process. What a network!
Twenty months after it was first announced, Microsoft’s unprecedented deal to buy Call of Duty and Candy Crush publisher Activision Blizzard for $69 billion appears to have beaten its final boss. The UK’s Competition and Markets Authority revealed on Friday that it has provisionally approved the tech giant’s latest version of the acquisition, which includes convoluted carve-outs for cloud gaming rights. After tons of dramatic twists and turns, the biggest gaming merger ever looks like it’s finally happening.
The Open World Racing Game That’s Been Gone For A Decade Is Coming Back
“This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft,” Colin Raftery, the CMA’s senior director of mergers, said in a press release. “With additional protections to make sure that the deal is properly implemented, this will maintain the structure of the market, enabling open competition to continue to shape the development of cloud gaming in the years to come, and giving UK gamers the opportunity to access Activision’s games in many different ways, including through cloud-based multigame subscription services.”
The CMA had previously rejected the deal over concerns that acquiring popular gaming franchises like Call of Duty, Overwatch, Diablo, and more would give Microsoft a monopoly in the cloud gaming space. Microsoft started hinting that it might get around the CMA’s decision by just removing Activision games from the UK entirely, and later sent out rumblings that it was preparing to close the deal even without permission from the Federal Trade Commission in the U.S. which had sued it over anti-trust concerns.
The FTC then sued for an injunction to block the deal, leading to an extradordiary multi-day trial in federal court full of testimony by gaming executives from Xbox, PlayStation, Bethesda, and other companies that included an unusual level of behind-the-scenes looks into the normally hyper secretive gaming industry.
How Microsoft saved the Activision Blizzard deal
The judge in the case ended up siding with Microsoft, however, paving the way for it to close the deal in the U.S. and eventually forcing the CMA back into negotiations on a reversal of its previous rejection. According to reporting by Bloomberg, it was all part of a bluffing strategy by Microsoft to ultimately save the deal.
To placate UK regulators, Microsoft has now agreed to sell cloud gaming rights for Activision Blizzard’s games to Ubisoft. While it can still pay to stream hits like Modern Warfare II and Diablo IV on services like Game Pass, Ubisoft will have final say for the next 15 years, keeping Microsoft from having exclusive control. That complicated carve-out only applies to the UK, however, and regulators said today that their last demand is for Microsoft to offer some sort of enforcement mechanism so that the CMA can check to make sure it is adhering to the terms of the agreement. A final decision for approval will arrive by October 6.
“The CMA’s position has been consistent throughout–this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved,” Sarah Cardell, CEO of the CMA, said in a press release. “In response to our original prohibition, Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns. It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”
Notably, the CMA’s provisional approval comes just one day after UK treasury head, Jeremy Hunt, met with gaming companies in California. The government agency released photographs from the event on social media today. They show Activision Blizzard CEO Bobby Kotick as one of the executives in attendance, and the one seated closest to Hunt. The longtime Call of Duty boss threatened earlier this year that the UK would become “death valley” if it did not approve the sale. Kotick is estimated to earn a windfall of $390 million once the deal goes through. That’s over 20 times the $18 million settlement Activision Blizzard agreed to pay the Equal Employment and Opportunity Commission following a multi-year investigation into sexual harassment and discrimination at the company.
Update 10/13/2023 8:51 a.m. ET: The CMA announced its final approval for the deal today, saying it was satisfied that Microsoft’s new cloud agreement with Ubisoft mitigates the threat of a monopoly in the cloud gaming space. The regulators blamed the tech giant for the process taking so long.
“ Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work,” said CMA chief executive Sarah Cardell. “Dragging out proceedings in this way only wastes time and money.”
Microsoft now has the greenlight to close the Activision deal on or before its new October 18 deadline.
The video game industry just got a lot smaller. The long and winding saga of Microsoft’s $69 billion purchase of Activision Blizzard has finally come to a close with the companies announcing the completed merger today following one last greenlight from regulators in the UK. Call of Duty is now part of Xbox and the tech giant has now surpassed Sony as the second biggest gaming company in the world, as gaming’s big march toward corporate consolidation continues.
The Open World Racing Game That’s Been Gone For A Decade Is Coming Back
In addition to the blockbuster military shooter, Activision Blizzard produces Overwatch 2, Diablo IV, and World of Warcraft. The acquisition will provide a raft of big games for Microsoft’s growing Xbox Game Pass subscription service, as well as make it a massive player on mobile with some of the biggest smartphone games in the world in Candy Crush and Call of Duty mobile. Microsoft signed a 10-year deal to keep Call of Duty on PlayStation, but has reserved the right to make other Activision Blizzard franchises exclusive to its Xbox platforms going forward.
The deal will also effectively expand Microsoft’s gaming business by roughly 10,000 employees. It’s not yet clear how many of them will remain, either due to redundancy layoffs or attrition of senior talent and executive level staff. Activision Blizzard CEO Bobby Kotick wrote in an email to staff today that he will stay on at the company reporting to Microsoft Gaming CEO Phil Spencer through the end of 2023.
Microsoft agreed to union neutrality with the Communication Workers of America last year, and starting 60 days from now Activision Blizzard employees will be able to get recognition of a union with majority support through a simple card check. Prior to joining Microsoft, the company had fought unionization efforts and recieved a number of labor complaints filed with the National Labor Relations Board.
Microsoft and Activision Blizzard first announced the groundbreaking merger back in January 2022. Filings with the Securities and Exchange Commission revealed that Spencer approached Kotick about the deal after the publisher’s stock price collapsed following major game delays and continued reports of past sexual harassment and misconduct by some of its employees.
A July 20, 2021 lawsuit by the California Civil Rights Department alleged widespread sexual harassment and discrimination within Activision Blizzard. Then a bombshell Wall Street Journal report on November 17, 2021 claimed that Kotick was aware of multiple past sexual misconduct lawsuits against the company but failed to report them to its board of directors. Activision has called the report misleading and is currently fighting the Civil Rights Department’s lawsuit in court.
However, a day after The Wall Street Journal’s report was published, Spencer emailed staff within Microsoft that he was “evaluating all aspects” of Xbox’s relationship with Activision Blizzard. The next day, he approached Kotick about buying the embattled company. Those talks eventually culminated in a deal to buy the Call of Duty publisher for $95 a share, a 45 percent premium over what the company was worth following the sexual misconduct reports and game production delays.
The Wall Street Journal and Bloomberg both reported at the time that Kotick was expected to resign after the deal closed, allowing him a graceful exit from the company he spent 30 years leading while the California lawsuit is still ongoing. Kotick also stands to make nearly $400 million from the sale via his stock holdings, over 20 times the $18 million settlement Activision Blizzard paid to the Equal Employment and Opportunity Commission over sexual discrimination allegations last year.
Microsoft and Activision Blizzard had originally planned to close the deal by last July, but battles with regulators in the UK and U.S. almost killed it off. The Federal Trade Commission attempted to block the merger in federal court over the summer, leading to a week-long trial that ended up revealing an unprecedented amount of behind-the-scenes info about Xbox, Sony, and other gaming companies, including leaked plans for upcoming consoles and private emails between top brass.
The FTC’s legal case ultimately failed, however, paving the way for Microsoft to address remaining reservations with the UK’s Competition and Markets Authority. As part of a reworked plan to win approval, Microsoft agreed to sell cloud gaming rights for Activision Blizzard games in the UK to Assassin’s Creed publisher Ubisoft, preventing it from being able to withhold streaming licenses for hits like Call of Duty and Overwatch from competitors like Sony. While Microsoft ultimately prevailed with regulators, the unexpected level of scrutiny resulted in a number of compromises and an unusual level of transparency that both companies may not have been counting on when the deal was first announced.
With the acquisition fights done, the new challenge for Microsoft will be how to integrate the massive publisher into its existing gaming business. That process will take years as well, and no doubt include its own set of twists and turns. Microsoft’s purchase of Bethesda Softworks’ parent company ZeniMax in 2020 doubled the size of Xbox Game Studios. Activision Blizzard is almost five times bigger. Its next big game, Call of Duty Modern Warfare 3 (Amazon), arrives on November 2, giving Microsoft the biggest release of the holiday season.