Microsoft has finalized its $68.7 billion deal to acquire Activision Blizzard, the publisher of Call of Duty, World of Warcraft, and Diablo. The Verge exclusively reported last week that Microsoft was planning to close today, and now it’s official. The acquisition required 20 months of battles with regulators in the UK and US, but Microsoft has closed its Activision Blizzard deal after defeating the Federal Trade Commission in a US federal court and restructuring the deal to appease the Competition and Markets Authority (CMA) in the UK.
“We love gaming. We play games, create games, and know first-hand how much gaming means to all of us as individuals and collectively, as a community. And today, we officially welcome Activision Blizzard and their teams to Xbox,” says Xbox chief Phil Spencer. “As one team, we’ll learn, innovate, and continue to deliver on our promise to bring the joy and community of gaming to more people. We’ll do this in a culture that strives to empower everyone to do their best work, where all people are welcome, and is centered on our ongoing commitment of Gaming for Everyone.”
The deal is Microsoft’s largest acquisition ever, far in excess of the $26 billion Microsoft paid to acquire LinkedIn in 2016 and the $7.5 billion it paid to acquire Bethesda in 2021. This is Microsoft’s biggest-ever push into gaming, too, and the company said at the original announcement of this megadeal that it will now be the “third-largest gaming company by revenue, behind Tencent and Sony.”
Microsoft now plans to add many of Activision Blizzard’s games to Xbox Game Pass. “Today we start the work to bring beloved Activision, Blizzard, and King franchises to Game Pass and other platforms,” says Spencer. “We’ll share more about when you can expect to play in the coming months. We know you’re excited – and we are too.”
Activision Blizzard made it clear earlier this week that Modern Warfare 3 and Diablo IV won’t be coming to Xbox Game Pass this year, though. Microsoft hasn’t provided an update on Xbox Game Pass subscription numbers since announcing 25 million subscribers alongside the original Activision Blizzard deal announcement in January 2022.
Microsoft will now add more than nine game studios from the Blizzard side alone to its Xbox Game Studios, alongside games studios in more than 11 locations for the mobile gaming King side of the acquisition. Microsoft has also transformed into a publishing powerhouse after the acquisition, with more than 8,500 Activision employees now joining Microsoft.
Activision Blizzard CEO Bobby Kotick will remain in place to help with the transition until the end of 2023. “I have long said that I am fully committed to helping with the transition,” says Kotick in an email to Activision Blizzard employees today. “Phil has asked me to stay on as CEO of ABK, reporting to him, and we have agreed that I will do that through the end of 2023. We both look forward to working together on a smooth integration for our teams and players.”
On Friday, Microsoft also reiterated that it is committed to the labor neutrality agreement it struck with the Communications Workers of America (CWA) in June 2022. “Now, more than sixteen months later, as Microsoft has closed its transaction to acquire Activision Blizzard, we affirm our commitment to our labor principles and innovative approach to union partnerships,” Microsoft’s Brad Smith wrote in a blog post. “Microsoft remains steadfast in our support of our current and future employees in whatever choice they make about their workplace and their representatives.” Workers at Blizzard’s Albany, NY offices and Activision subsidiary Raven Software have unionized.
It hasn’t been an easy deal to finalize for Microsoft. The CMA initially blocked the deal in the UK over cloud concerns, months after the FTC initially sued to block the Activision Blizzard acquisition in the US. After the FTC then failed to secure a preliminary injunction to block Microsoft from finalizing its Activision Blizzard acquisition, the CMA and Microsoft instantly agreed to pause their legal battles for a remedy in the UK and eventually negotiated an agreement over cloud gaming rights.
The FTC appealed the decision in its case and says it will continue that appeal. “Microsoft and Activision’s new agreement with Ubisoft presents a whole new facet to the merger that will affect American consumers, which the FTC will assess as part of its ongoing administrative proceeding,” spokesperson Victoria Graham said, according to Reuters. “The FTC continues to believe this deal is a threat to competition.”
Update October 13th, 4:44PM ET: Added Microsoft statement about its labor neutrality agreement.