Microsoft cleared significant hurdles to its plan to buy videogame maker Activision Blizzard after a U.S. judge gave a thumbs-up to the $69 billion deal and a British regulator suggested it could reconsider its opposition. U.S. District Court Judge Jacquelin Scott Corley’s decision puts to rest Federal Trade Commission chief Lina Khan’s bid to scupper the merger. Corley ruled that the FTC failed to show the deal would harm competition and said that the company’s pledge to keep popular games like Call of Duty available on rival consoles, Nintendo’s Switch and Sony’s PlayStation was enough to ease concerns.
The ruling means Microsoft can close the deal by the end of this month. That will catapult the Xbox maker into third place among the world’s biggest video game companies, behind China’s Tencent and games console rival Sony. It will also boost Microsoft’s presence in mobile gaming, where it currently has a limited presence, while giving it a massive stake in some of the world’s most popular game franchises — from Candy Crush to Call of Duty.
But despite the E.U. clearing the way for the deal, Microsoft faces an antitrust challenge from Britain’s Competition and Markets Authority, which blocked it last month over concerns that the takeover would reduce competition in the nascent cloud gaming sector. The U.K. regulator has said it is willing to consider new proposals from Microsoft that could address its concerns. It has also asked to hold a hearing scheduled for later this month while it works on them.
In a statement, Microsoft President Brad Smith said that the CMA’s decision “rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom.” But he added that the company was committed to the deal and would continue to work with the CMA on its final remedies. The U.K.’s High Court could still overturn the decision, but that seems unlikely given the judge’s apparent rejection of the government’s allegations.
Investors liked the ruling, sending shares of Activision up by 10% on the day. The stock has surged more than 40% since the beginning of the year as investors have become more comfortable with the likelihood that the deal will get done. The companies have been in talks for more than two years. If it goes through, it would be the largest acquisition in the videogame industry’s history and one of the biggest in tech history. The company has had a troubled past with criticisms of everything from the ease of use of its software to the abuse of permatemp employees (temporary workers who are kept on staff for years without paying benefits). But those days may be long gone. The company’s dominance in P.C. gaming is undisputed, and the market for console games is increasing. In addition, there’s a lot of demand for online gaming services, often bundled with these titles.
