Rajkotupdates.News : Microsoft Gaming company to buy Activision Blizzard for Rs 5 lakh crore. The astonishing deal is gearing up for an imaginative gaming future that would surpass the present limitations. If the most successful company which had the richest CEO in the world takes over Activision Blizzard would change the gaming industry.
As the deal proposed by Microsoft is of eminence importance to the gaming industry, economy, and government, Satya Nadella is attempting his best to secure the deal despite being grounded everywhere.
In the gaming industry, Satya Nadella is going to make history with the acquisition of the biggest deal until now by taking ownership of Blizzard. Blizzard is a company that was merged with Activision in 2008. Both companies have American roots and their headquarters are also located in the U.S.A.
Presently, Activision Blizzard is one of the most popular video gaming companies holding Call on Duty and Candy Crush under it. Likewise, Microsoft needs no introduction as it’s a well-known brand as well. Microsoft Xbox has already engrossed the world.
The merger of both companies could be creative innovations, however, they would also limit certain aspects of the industry. Hence, there are various obstacles to the fulfillment of this deal.
Competitive and Markets Authority (CMAs) Response to the Deal
Rajkotupdates.News : Microsoft Gaming company to buy Activision Blizzard for Rs 5 lakh crore, $68.7 billion. The major restriction the companies faced after annoying their plans if incorporated together was from CMAs. CMA has ordered the cease of the acquisition deal after submitting a summary — that impacts the deal on the world.
Until further order, both companies can’t incest or buy into each other. CMAs primarily concerned about the power Microsoft will yield after this acquisition. Microsoft already owns more than 60 to 70 percent of the cloud gaming services. Moreover, in the remaining 30 to 40 percent, Acquisition Blizzard has a huge share.
The coalition would grant the companies the authority to rule over the whole gaming industry with no substantial competitors, which is a nightmare for other gaming companies like Soby and Tencent. Hence, the U.S. regulators have impeded the deal, and “before their consent”, the deal can’t be locked.
CMA released an interim order stating they are “preventing pre-emptive actions” from Microsoft and Activision. They firmly believe that this deal could pose a threat to innovations, marginalization, and limited choices for gamers in the cloud gaming business.
Further, both companies can’t buy any subsidiaries or invest in each other for the time being to avoid rigorous criticism. Contrastly, spokesperson of the Microsoft criticized CMA’s decisions and declare they will “appeal the decision” to Competition Appeal Tribunal.
Yet, it seems like the companies are serious about the acquisition and won’t back down. They even announced the U.K. is “clearly closed for business” after they interfered in the Microsoft-Activation agreement.
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Government Interference with Microsoft-Activation Agreement
Government authorities are hostile to Rajkotupdates.News : Microsoft Gaming company to buy Activision Blizzard for Rs 5 lakh crore. U.S. and U.K. governments are trying to cease this deal. Authorities perceive this agreement could make Microsoft a competitive weapon and a massive power that could influence the world bitterly.
The U.S. regulators put forward their concerns about expensive gaming products and the emancipation of Microsoft to control the whole gaming industry and its sales. Moreover, it would make it tough to play or buy advanced games.
British and Canada impeded the deal outright as well. These countries’ authorities claim that this agreement could give leverage to Microsoft and Activision to leg up over their competitors.
What made Microsoft buy Activision Blizzard?
First of all, this deal could become a legend and give Microsoft access to powerful games like Overwatch, World of Warcraft(1M plus downloads), Call of Duty (over 100M downloads, and Candy Crush. (Over 500 M downloads).
Secondly, Microsoft Corporation claims that Sony Playstations are selling its products like Xbox gaming consoles. Due to this, they have suffered substantial losses over the years. Hence, they want to buy Blizzard and get the influence to halt Sony PlayStation from selling their gaming devices.
Additionally, they also want to upgrade the gaming system and transform it into a Netflix subscription style (Game Pass). Microsoft also claims that the quality of games in the future will tremendously elevate if this agreement gets acceptance.
Sony’s fears are being realized
Rajkotupdates.News : Microsoft Gaming company to buy Activision Blizzard for Rs 5 lakh crore. This news has brought heartache to Sony as their fear of losing revenues is going to be realized soon. Sony isn’t in favor of the deal due to its impacts on playstations and leaving no room for them for sales.
Sony PlayStation sold over half of Warfare 2 installments (the latest version of the game). In the first week, Warfare 2 made over $1 billion and half of the sales went up to Sony. But if Microsoft gets successful in buying Blizzard then it would be hard to incur such selling revenues.
In contrast to that, Microsoft denied all such accusations. A representative from the company said that they don’t want to hurt anyone and that it’s justified to make games available to millions of users. Further, the corporation also declared openly that Nintendo playstations will get access to Call of Duty. The same deal was also provided to Sony, however, they rejected it.
Role of Antitrust Authorities in Microsoft’s Agreement with Activision
The Federal Trade Commission (FTC) and the Depart of Justice (DOJ) stopped the approval — Rajkotupdates.News : Microsoft Gaming company to buy Activision Blizzard for Rs 5 lakh crore. FTC and DOJ are the two antitrust forces working in the U.S. to ensure antitrust constitutions. They protect freedom and ensure equal justice for businesses.
For several decades, they haven’t been meddling with vertical mergers due to their slight impact on the society or market. However, they have realized that vertical mergers are gaining much influence and power due to these tendencies. Hence, they decided to take similar measures to both horizontal and vertical mergers.
Antitrust Enforces New Policies on Vertical Mergers
Antitrust policies have the following fundamental points to halt threatening vertical mergings;
- Companies that have access to shares up to a certain amount can’t acquire shares in another company having the same market.
- Using coalescing companies as a strategic team to dissuade rivals is unacceptable.
- Companies having a solid foundation and market presence can’t integrate with other businesses. Such as multibillion-dollar firms shouldn’t acquire other businesses but expand by increasing their capacity and quality of the products (services).
Microsoft doesn’t harmonize with any of the above legislations. Microsoft having a multi-billion dollar revenue and an influential presence in the market can’t buy another company in the gaming industry.
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