XBOX: Bringing Joy to the Cloud: The Microsoft Deal to Acquire Activision Blizzard, the publisher of Call of Duty, World of Warcraft, and Diablo

Microsoft has finalized its $68.7 billion deal to acquire Activision Blizzard, the publisher of Call of Duty, World of Warcraft, and Diablo. The final report on Microsoft was done last week and now it is 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.

The Xbox maker originally announced the deal in January 2022, and has faced close scrutiny from regulators ever since — including an FTC v. Microsoft case that revealed plenty of Xbox secrets. The Federal Trade Commission is still appealing its failure to secure a preliminary injunction to block Microsoft’s deal, with a decision from the Ninth Circuit Court of Appeals due in December.

Microsoft struck deals to appease EU regulators, which will result in a variety of cloud gaming services being made available. Those deals include:

“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. Phil Spencer, who is the chief of the XBOX team, said that they officially welcome the team to the platform. We will learn, innovate and continue to deliver on our promise of bringing joy and community of gaming to more people. We will do this in a culture that strives to empower everyone to do their best work, where all people are welcome, and that 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 megadeal is Microsoft’s biggest push into gaming to date and according to the company, it will be the third-largest gaming company by revenue.

Games that are part of the Game Pass, but will not be coming to the console this year, were made very clear by the company earlier this week. Microsoft didn’t give a new Xbox Game Pass number since announcing the 25 millionth subscriber in mid-January.

We are happy that our coworkers, co-workers, and teammates are at the company. Bobby Kotick will stay in his role through the end of 2023, reporting directly to me, to ensure a smooth and seamless integration. We look forward to working together as a unified team and we will share more updates on our new organizational structure in the coming months.

A Very Special Thank You for All Your Help in Getting Streamed. I’ll be at Ubisoft/Extra for Xbox

I‘d like to give a very special and heartfelt thanks to everyone who helped make this acquisition possible. We couldn’t have accomplished this without your dedication.

I will be visiting the offices of all three companies over the next few weeks. We’ll have the opportunity to welcome our new colleagues at our next virtual all-hands for Xbox employees, and for the greater Microsoft community, we’ll discuss this and more in the November 8 session of the Company Strategy Series.

We have been active in the streaming space for a long time and that is one of the reasons Microsoft came to us; we were the first studio that Google worked with for Stadia, and we also have partnerships with other companies in the space. “To Microsoft, it made sense that if somebody was going to be familiar with the space and know what the value would be for streaming, it would be us. And we saw the value as well.”

The deal between the companies means that games from the company will be included in the game subscription service. Work begins on bringing these games to Ubisoft’s subscription today, but it’s not clear when they’ll all be available.

The licenses are for 15 years, so the company will still be able to distribute games even after that time.

They expect them to be on Ubisoft Plus, and that they will be able to license them to companies as well. “Perhaps there’s a company somewhere in the world that wants to license those rights and add to the streaming service they have or start up a new streaming service, and I think that’s going be part of the fun of the next 15 years or more of how streaming evolves.”