Microsoft is preparing to close its $69 billion acquisition of video game developer Activision Blizzard even as the Federal Trade Commission sues to block it.
The merger would bolster Microsoft’s first-party credentials by adding Activision, Blizzard, and King under its Xbox Game Studios division and giving the company ownership of key franchises such as Call of Duty. It also is expected to boost subscription revenue, including for its Xbox Game Pass service.
It will be an important move for Microsoft as it pushes into the world of play-anywhere, subscription-based gaming through its cloud gaming services and Xbox Game Pass. It is also an attempt to build a rival to Sony’s PlayStation.
Getting a green light from the European Union and UK regulators is likely to be crucial for Microsoft’s plans. The EU, in particular, is set to make a decision on the deal next month.
The UK Competition and Market Authority (CMA) has been pushing back against the merger, pointing to concerns that it could prevent the availability of Call of Duty on rival platforms. But the regulator has since changed its position and is now likely to approve the deal according to a NY Post report.
Concessions to the deal, like Activision selling off its Call of Duty franchise to a different buyer, may help ease concerns. That would decrease the price Microsoft is offering to buy the company and compensate shareholders for a potential loss of value in the stock.
Brad Smith, Microsoft’s president, has been working hard to win over skeptical lawmakers. He met with FTC chairwoman Lina Khan early this month to discuss ways to resolve antitrust issues around the acquisition. He has presented Microsoft as a friendly, global company willing to work with lawmakers to get things done.