On January 18, 2022, Microsoft announced its plan to buy Activision Blizzard for $68.7 billion. The purchase was completed on October 13, 2023, with the total cost reaching $75.4 billion. According to the agreement, Microsoft placed Activision Blizzard under its Microsoft Gaming division, which operates alongside Xbox Game Studios and ZeniMax Media. Through this acquisition, Microsoft gained control of several game franchises, including Call of Duty, Crash Bandicoot, Spyro, Warcraft, StarCraft, Diablo, Overwatch, and Candy Crush, which are owned by Activision, Blizzard Entertainment, and King. As of 2023, this acquisition remains the largest video game acquisition in history by value.
After shareholders approved the deal, the merger was examined by several national groups that check for unfair business practices. Early approvals were given by the European Commission and China's State Administration for Market Regulation (SAMR), among others. However, the United States' Federal Trade Commission (FTC) and the United Kingdom's Competition and Markets Authority (CMA) raised concerns about the merger. Sony also expressed concerns, fearing that Microsoft might make the popular Call of Duty franchise exclusive to the Xbox platform. Microsoft promised to keep the franchise available on other platforms until 2033. The FTC later dropped its challenge after courts did not support its claim that the merger would harm competition. To address the CMA's concerns, Microsoft agreed to provide cloud gaming support for Activision Blizzard's games to Ubisoft for ten years.
Background
Activision Blizzard is one of the largest companies that makes and sells video games worldwide. In 2021, the company made about $8.8 billion in money each year. The company has five different parts: Activision Publishing, Blizzard Entertainment, King, Major League Gaming, and Activision Blizzard Studios. Some of the games owned by the company include Call of Duty, Crash Bandicoot, and Spyro from Activision's studios; Warcraft, Diablo, StarCraft, and Overwatch from Blizzard Entertainment; and Candy Crush Saga from King.
Microsoft is a major company in computing software and also makes the Xbox line of game consoles. Microsoft operates Xbox Game Studios, which is a group of developers that create games made by Microsoft. In March 2021, Microsoft completed its purchase of ZeniMax Media and Bethesda Softworks for about $7.5 billion. This made it one of the biggest video game purchases at that time.
History
On January 18, 2022, Microsoft announced its plan to buy Activision Blizzard for $68.7 billion in cash, or about $95 per share. Activision Blizzard’s stock price increased nearly 40% before the market opened that day. If completed, the deal would make Microsoft the third-largest gaming company globally and the largest in the Americas, following companies like Tencent in China and Sony in Japan. It would also be the most expensive video game-related acquisition to date. Goldman Sachs will help Microsoft with financial matters, and Allen & Company will assist Activision. Simpson Thacher will advise Microsoft legally, while Skadden will advise Activision. Both companies’ boards approved the deal, and it is expected to close in 2023 after government reviews. Once completed, Activision Blizzard would operate as a separate part of Microsoft’s new Gaming division, alongside Xbox Game Studios, with Phil Spencer leading the division. Microsoft would also offer Activision Blizzard’s games on its Xbox Game Pass service. Spencer mentioned plans to revive older Activision Blizzard games, such as King’s Quest, Guitar Hero, and Hexen: Beyond Heretic.
Activision Blizzard’s CEO, Bobby Kotick, said discussions with Microsoft’s CEO, Satya Nadella, and Spencer began in 2020 and 2021. These talks focused on concerns about the power of companies like Tencent, NetEase, Apple, and Google, as well as Activision Blizzard’s lack of expertise in areas like machine learning and data analytics. Kotick noted that these discussions led to the idea of Microsoft acquiring Activision Blizzard at a favorable price. He also mentioned that earlier in 2020, Microsoft had tried to buy TikTok from ByteDance, but this deal did not happen. Kotick suggested that Microsoft and Activision could have co-owned TikTok, but this idea was not pursued.
Spencer stated that Microsoft’s goal in acquiring Activision Blizzard was to gain access to its mobile games, such as Candy Crush Saga from Activision’s King division. He noted that while there are 200 million console gamers worldwide, the mobile gaming market includes over 3 billion people. Activision Blizzard described the gaming industry as a key part of the emerging metaverse, a term for a shared digital world. Some journalists compared Microsoft’s acquisition of Activision Blizzard and its earlier purchase of Bethesda Softworks in 2021 to efforts to compete with Meta Platforms, formerly known as Facebook.
The acquisition announcement followed a lawsuit filed in July 2021 by California’s Department of Fair Employment and Housing, which accused Activision Blizzard of sexual harassment, discrimination, and retaliation. By November 2021, the lawsuit expanded to include actions by Kotick. Reports from The Wall Street Journal and Bloomberg News suggested the acquisition timing was influenced by the ongoing lawsuit. Activision Blizzard had also considered buyouts from other companies, like Meta Platforms, due to poor performance of recent games and production delays. Microsoft approached Activision Blizzard again after a November 2021 Wall Street Journal report about potential buyouts. Despite Kotick’s initial reluctance, the board approved the deal due to concerns about the lawsuit’s impact. The buyout would allow Kotick to leave the company later, with payments ranging from $252.2 million to $292.9 million.
According to official statements, Kotick will remain Activision Blizzard’s CEO during the deal process, as the company remains independent until the acquisition closes. The Wall Street Journal reported that Kotick may leave his position once the deal is completed, though he expressed interest in staying. Microsoft has not directly addressed the lawsuit but announced it would review its own policies on sexual harassment and gender discrimination. Activision Blizzard’s shareholders approved the acquisition nearly unanimously in April 2022.
The deal was scheduled to close by July 18, 2023, with Microsoft owing Activision Blizzard $3 billion if it failed. However, both companies could extend the deadline or renegotiate terms. The UK’s Competition and Markets Authority (CMA) initially rejected the merger but later extended its review period to August 29, 2023, and then to October 18, 2023. After the CMA approved revised terms on October 13, 2023, Microsoft completed the acquisition that same day.
Regulatory response
Because the acquisition was very large, government agencies in several countries reviewed it to make sure it did not harm competition. In the United States, the Federal Trade Commission (FTC) reviewed the deal instead of the U.S. Department of Justice. This happened because the FTC had raised more concerns about mergers in the Big Tech industry in recent years. U.S. Senators Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse, and Cory Booker told the FTC that both companies had not protected workers' rights and that the merger should be blocked if it could create a monopoly or weaken workers' ability to negotiate. The FTC announced on December 8, 2022, that it intended to block the acquisition. The FTC said the deal could harm consumers of Activision Blizzard's games and give Microsoft too much control over parts of the gaming industry, such as cloud gaming. The FTC also mentioned that Microsoft had broken a promise to the European Union not to make Zenimax games exclusive to Xbox. The European Commission said it had approved the Zenimax acquisition without conditions, as it believed the deal would not harm the gaming market.
Microsoft responded to the FTC by saying that Sony also has exclusive games that cannot be made available on Xbox. Microsoft also said it would continue offering multiplayer games like Elder Scrolls Online and Fallout 76 on all platforms. Microsoft initially challenged the FTC's authority but later removed that argument from its response. In February 2023, the FTC denied Sony's request to stop a subpoena asking for documents about Sony's exclusive deals. The FTC then asked a court to block the merger on June 12, 2023. The FTC said Microsoft and Activision Blizzard had previously said the deal could not close due to antitrust reviews in other countries but had not guaranteed they would keep that position.
A court granted a temporary block on June 13, 2023, and a hearing to decide if a permanent block should be issued took place from June 22 to 30, 2023. Microsoft said it might abandon the deal if the block was approved, calling the process a "three-year administrative nightmare." During the hearing, the FTC focused on the impact of Call of Duty on competition, console exclusivity, and the cloud gaming industry.
On July 11, 2023, the court denied a permanent block, allowing Microsoft to proceed with the merger, though the case continued. The judge wrote that the FTC had not shown enough evidence that the merger would harm competition, and that the deal could increase consumer access to Activision games. The FTC appealed the decision to the Ninth Circuit Court on July 12, 2023, but the court denied the appeal on July 14, 2023.
The FTC withdrew its challenge on July 20, 2023, but said it might refile later. It reopened its case on September 27, 2023, but could not stop the merger. In February 2024, the FTC argued that Microsoft's job cuts in January 2024 went against previous promises to keep the companies independent after the merger. The FTC also criticized Microsoft's new Game Pass pricing and a low-cost tier that limited access to games.
In early May 2025, the Ninth Circuit denied the FTC's appeal, and the FTC dropped the case on May 22, 2025.
In September 2022, the European Commission (EC) started reviewing the acquisition under EU merger rules. The EC asked game companies about the deal's impact and whether Microsoft might block competitors from Activision games. On November 8, 2022, the EC said it would review the merger further to ensure the gaming industry remained competitive.
The EC filed a formal complaint on February 3, 2023, saying Microsoft might block access to Call of Duty, harming competition and raising prices for consumers. Microsoft met with EC regulators on February 21, 2023, and announced deals to bring Call of Duty to Nintendo and Nvidia's streaming service. The EC approved the acquisition on May 15, 2023, after Microsoft agreed to allow Activision games on cloud services. The EC said platform exclusivity was not a concern because it would not be financially viable to withhold Call of Duty from other platforms, and Sony had the ability to compete fairly.
The UK's Competition and Markets Authority (CMA) planned a detailed review of the merger in August 2022. The phase 1 ruling was pending.
Reactions and commentary
Several employees of Activision Blizzard have expressed hope but caution about the company's recent deal. The ABK Workers Alliance, a group of employees trying to form a union after the DFEH lawsuit, said the acquisition did not change their goals. A report by Business Insider mentioned that some Microsoft employees have raised concerns about the deal, specifically regarding past sexual harassment scandals and Activision Blizzard's workplace culture. These employees hope for "specific actions to ensure we do not bring in a harmful or unwelcome culture." On January 19, 2022, World Bank president David Malpass criticized the acquisition, comparing the price paid for the company to the smaller amounts of money available to developing countries during the COVID-19 pandemic. The AFL-CIO supports the merger because Microsoft signed a labor neutrality agreement with the Communications Workers of America, who also support the merger, after the acquisition was announced.
Concerns about Microsoft's ownership of the Call of Duty franchise, which sold over 400 million units by April 2021 and is considered one of the most valuable video game properties, have been raised by Sony Interactive Entertainment and regulators. Shortly after the acquisition was announced, Sony said it expects Microsoft to honor all of Activision Blizzard's publishing agreements for multiplatform games, ensuring that Call of Duty remains available on the PlayStation platform and is not made exclusive to one console. Microsoft president Brad Smith and Xbox head Phil Spencer assured that Microsoft will continue these agreements and expressed a desire to keep Call of Duty and other popular Activision Blizzard games on PlayStation beyond the terms of the current agreements. They also mentioned exploring the possibility of bringing these games to Nintendo consoles.
In September 2022, Phil Spencer said Microsoft had written a letter to Sony in January, confirming their commitment to keep Call of Duty on the PlayStation for several years beyond the current agreements, which are set to last until 2024. Spencer stated that their offer to Sony "goes well beyond typical gaming industry agreements." Sony's president, Jim Ryan, responded by saying Microsoft only committed to keeping Call of Duty on PlayStation for three additional years beyond the current contract terms and that "their proposal was inadequate on many levels and failed to consider the impact on our gamers." Public documents from the UK's investigation showed that Microsoft would be limited by prior agreements between Sony and Activision to provide Call of Duty on Xbox Game Pass for several years.
Microsoft stated it had written to Sony on November 11, 2022, to agree to a ten-year commitment for Call of Duty to remain available on PlayStation and other platforms, not just Xbox. Sony said Microsoft's goal with the acquisition is to reduce competition with PlayStation by making it more similar to the Nintendo Switch, which focuses on family-friendly games rather than adult-rated titles like Call of Duty. In addition to the agreement with Sony, Microsoft also committed to a ten-year deal to bring Call of Duty to Nintendo's platforms in December 2022, showing regulators that they do not plan to make the game exclusive to Xbox or Windows. By July 16, 2023, Sony signed a "binding agreement" with Microsoft that ensured Call of Duty would remain on the PlayStation family of platforms.
Several independent game publishers and developers, including Curve Games, Finji, Iam8bit, and Strange Scaffold, expressed support for the deal according to 2023 court filings.
Aftermath
Kotick remained the CEO of Activision Blizzard until December 29, 2023, after which he retired from the company, as he had promised before.
During 2024 and 2025, Microsoft reduced the number of employees across its company, including within the Microsoft Gaming division. The company also cancelled several games that had been in development for many years. In January 2024, Mike Ybarra, the president of Blizzard, and Allen Adham, the chief design officer, left the company. Johanna Faries, who managed the Call of Duty series, became Blizzard’s new president starting on February 5, 2024. This change was notable because Blizzard’s leaders have usually started in gaming and tech roles.
In 2025, Microsoft raised the retail price of its Xbox consoles twice in North America, because of changes in the overall economic situation, which included tariffs on many imported goods set by Donald Trump. After news that Microsoft increased the price of Xbox Game Pass by up to 50%, Lina Khan, a former FTC commissioner, stated, “Microsoft’s purchase of Activision has led to higher prices and job losses, which hurt gamers and game developers. More companies merging and higher prices often happen together. As dominant firms become too-big-to-care, they can worsen conditions for customers without facing consequences.”