The Potential Consequences of Activision Blizzard Remaining Independent

The gaming industry has been working under the assumption that Activision Blizzard would become a subsidiary of Microsoft by 2023, following the announcement of the $68 billion acquisition. However, with regulatory bodies on both sides of the Atlantic expressing concerns, the deal's completion is no longer a certainty. The acquisition, which would make Microsoft's gaming division the third-largest in the world, has been undergoing scrutiny due to its massive scale. Microsoft's largest-ever acquisition has attracted attention from regulators, who are investigating the potential impact on competition, particularly regarding the Call of Duty franchise. The UK's Competition and Markets Authority has released documents detailing the arguments presented by Microsoft and Sony, with Microsoft acknowledging Sony's stronger first-party software lineup and Sony expressing concerns about the potential loss of Call of Duty to Game Pass exclusivity. As regulatory investigations continue, the possibility of the deal being blocked has become more plausible, raising questions about the future of the gaming industry and the potential consequences for both Microsoft and Activision Blizzard. If the deal falls through, Microsoft may need to reconsider its strategy to achieve market leadership, while Activision Blizzard could face significant internal challenges, including a potential decline in morale and staff attrition. Despite the uncertainty, the markets still indicate a high likelihood of the deal completing, but the odds are no longer as favorable as they once were.