How good and bad could Microsoft's $68.7 billion acquisition of Activision Blizzard be?

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Microsoft-Activision Blizzard story continues...

Here is how good and bad could Microsoft's $68.7 billion acquisition of Activision Blizzard be.

In January 2022, Microsoft announced that it was acquiring Activision Blizzard, one of the largest video game companies in the world, for a staggering $68.7 billion. This deal has generated a lot of buzz in the gaming industry, with many people wondering what it could mean for the future of gaming.

On the one hand, the acquisition could be seen as a positive development for both Microsoft and Activision Blizzard. For Microsoft, the deal would give the company access to some of the most popular and successful video game franchises in the world, including Call of Duty, World of Warcraft, and Diablo. This would allow Microsoft to expand its presence in the gaming market and potentially attract a larger audience of gamers.

As per Bloomberg report: "The US Federal Trade Commission on Wednesday voted to try to halt Microsoft’s purchase of game publisher Activision, saying the deal would harm competition. Microsoft is a giant in video games by virtue of its Xbox game console and Halo and Minecraft franchises, among other titles. In scooping up the creator of some of the industry’s biggest hits – including Call of Duty and World of Warcraft – Microsoft might well limit rivals’ access to Activision’s hit games, the FTC said."

Brad Smith, Microsoft’s president, said in response that he believed the deal would “expand competition and create more opportunities for gamers and game developers.” He said the company was prepared to offer concessions to the FTC, but that Microsoft would stand up for the deal in court.

Additionally, the acquisition could also provide a boost to Activision Blizzard's bottom line. Microsoft is a large and successful company with a strong track record of profitability. As a result, the acquisition could provide Activision Blizzard with the financial resources and expertise it needs to continue developing and releasing high-quality games.

However, the acquisition also has the potential to be a negative development for both companies. For one thing, the $68.7 billion price tag is a huge amount of money, and there is no guarantee that the deal will pay off in the long run. If the acquisition doesn't result in increased profits or market share for either company, it could be seen as a waste of resources.

Furthermore, there is also the potential for conflicts of interest to arise as a result of the acquisition. For example, Microsoft's Xbox brand competes directly with Activision Blizzard's Call of Duty franchise in the console shooter market. This could create tension between the two companies and potentially lead to a decrease in the quality of their products.

Verdict

In conclusion, the Microsoft-Activision Blizzard acquisition could have both positive and negative effects on the gaming industry. While the deal has the potential to provide a boost to both companies' bottom lines, there are also risks involved, including the potential for conflicts of interest and the high price tag. Only time will tell whether the acquisition will ultimately be seen as a good or bad move for both companies.

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