January 18, 2022. Microsoft (MS) announced the 'deal of the century' to acquire Activision Blizzard, the largest game developer in North America. The acquisition price was $69 billion (approximately 93 trillion KRW), representing a 45% premium on Activision Blizzard's stock price, making it the largest deal in the global IT industry. The acquisition is expected to be finalized as early as this month after receiving final approval from the U.S. and U.K. governments.
MS Builds Software Kingdom... Ambition for a 'Gaming Kingdom'
Since pioneering the personal PC era in the 1970s with 'DOS,' MS has dominated the global PC market by expanding into nearly every software sector, including operating systems, web browsers, and cloud services.
However, as the paradigm shifted to the mobile industry, MS began to struggle in its core business. To secure future growth, it expanded into entertainment by launching the 'Xbox' console game in 2001.
Although MS was the undisputed leader and the 'top of the top' in the PC era, it remained stuck in 2nd or 3rd place in the entertainment sector, wandering for 20 years.
Activision Blizzard owns blockbuster online games such as 'StarCraft,' 'Warcraft,' and 'Diablo,' as well as King.com, a mobile game company famous for the 'Candy Crush' series.
Formed through a merger with Vivendi Games in 2008, the company has established itself as the undisputed number one game developer in North America in terms of market capitalization, revenue, development, and publishing. Currently, about 400 million people in 190 countries worldwide enjoy Activision Blizzard's games every month.
The meeting of the number one software company and the number one game company is expected to reshape the global gaming market. MS plans to release many popular Activision Blizzard games, including the three major PC online games Diablo, Warcraft, and StarCraft, on its game subscription service 'Game Pass,' aiming to become the 'Netflix of gaming.'
MS has already secured game content by acquiring Mojang, the developer of 'Minecraft,' in 2014, and ZeniMax Media, owner of 'The Elder Scrolls,' in 2020.
MS and Activision Unite: "Will Hold More Powerful Hegemony Than Japan's Nintendo"
U.S. IT media Mashable recently reported, "With this merger, MS-Activision Blizzard will become the dominant force in the global gaming market," adding, "They will hold a more powerful hegemony economically and culturally than Japan's Nintendo."
There is also a forecast that Xbox, currently trailing far behind Sony's PlayStation, will dramatically change the gaming market landscape by leveraging Activision Blizzard's intellectual property (IP).
This union also includes a grand vision to respond to the 'metaverse.' After establishing a foothold with the game subscription service, MS aims to dominate the game entertainment sector based on cloud technology within the metaverse trend.
Satya Nadella, MS CEO, declared, "This acquisition will accelerate the growth of MS's gaming business across mobile, PC, console, and cloud, and provide building blocks for the metaverse."
Bloomberg News predicted that gaming will be the first industry to generate massive revenue in the metaverse, and MS can seamlessly embrace Activision Blizzard's loyal community.
MS Overcomes Regulatory Barriers in the U.S. and U.K... Final Approval Imminent
The big deal between the two companies, which faced multiple threats of collapse due to acquisition blocks by governments in the U.K., U.S., and other countries, is nearing final approval. The U.K. competition regulator, the Competition and Markets Authority (CMA), stated on the 22nd of last month that "(the revised proposal submitted by MS) has largely alleviated concerns about market monopoly" regarding MS's acquisition of Activision Blizzard.
The CMA added, "This opens the way for the MS-Blizzard merger to proceed," and said it plans to conclude consultations with MS by the 6th of next month.
In the U.S., where antitrust concerns were significant, the chances of approval have increased. The U.S. federal court dismissed the Federal Trade Commission's (FTC) injunction request to block MS's acquisition of Activision Blizzard, reversing the atmosphere.
Earlier, the European Union (EU) regulatory authority, the European Commission, approved the MS-Blizzard merger in May.
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