The Federal Trade Commission (FTC) has filed an official
complaint to block the merger of Microsoft and Activision Blizzard King. After
reviewing the details, FTC found out that Microsoft planned the acquisition of
Activision Blizzard King for $68.7 billion, as announced in January 2022.
In an official statement, the FTC claims to "Seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets."
Vice chairman and President of Microsoft, Brad Smith
released a statement regarding the decision, saying the company had
"believed in giving peace a chance" but will not back down from
making its case in court. If the FTC's lawsuit is successful, it is unlikely
the video gaming world will see a deal this big anytime soon.
A quite relevant example to mention here is ‘Tencent’. It held the title of ‘most valuable acquisition’ for five years. It bought an 81.4 percent share of developer Supercell, the firm behind mobile hit Clash of Clans, for $8.6 billion in 2016.
Microsoft has heavily invested in the games space for some
time now and Activision Blizzard King can be considered as the tech giant’s
most recent and most profitable catch. In 2020, it bought ZeniMax Media for
$7.5 billion to bolster its roster of internal studios in the lead-up to the
release of its current-gen consoles Xbox Series X and Series S. Its acquisition
of Minecraft developer Mojang for $2.5 billion in 2014 pays dividends to this
day as well, with total game copies sold doubling to 200 million between 2016
and 2020 according to company statements. It is interesting to note that Sony
also heavily invested in other video game studios following the announcement of
the deal in January 2022, buying Destiny 2 developer Bungie for $3.6 billion.
According to media reports, there are only 17 video game
company mergers or acquisitions in history that have had a price tag of more
than $1 billion. Some of the deals that have reached this mark include Microsoft,
Tencent, Activision Blizzard, and Take-Two.
The billion-dollar deals often include mobile game
developers like Zynga, Supercell, King, and Moonton, which ByteDance scooped up
in 2021, is no coincidence. The revenue in the mobile game market was estimated
at $94 billion or a market share of 70 percent in 2020 according to the
Statista Digital Market Outlook. The market encompasses free-to-play games with
in-app purchases and regular-priced games.
Infographic by: statista
