Microsoft’s $69B Activision Blizzard Deal in Danger

A regulatory push to prevent monopolies in emerging tech sectors could blow up the largest gaming deal in history. 

Microsoft’s $68.7 billion deal to acquire Activision Blizzard faces a fraught path to regulatory approval in both the U.S. and U.K.

• The Federal Trade Commission is reportedly concerned that the deal could allow Microsoft to hold a dominant position in the emerging cloud gaming sector.
• Microsoft may pledge to allow gaming rivals continued access to top Activision Blizzard titles such as “Call of Duty” and “World of Warcraft.”
• FTC Chair Lina Khan hasn’t commented specifically on Microsoft’s deal but said the agency is taking a hard look at cases where companies use mergers to maintain or establish market dominance in times of technological transition.

The deal is also under scrutiny from the U.K.’s Competition and Markets Authority and the Australian Competition & Consumer Commission. 

Market Pressure

One of the world’s best-known investors is banking on the deal going through. 

Warren Buffett’s Berkshire Hathaway has steadily increased its stake in Activision Blizzard to at least 9.5% of the company in the hopes of cashing in at Microsoft’s agreed-to price of $95 per share. Activision’s price of $74.72 still represents some skepticism among investors that the deal will go through.

This year has been rough on Microsoft, as the tech giant’s stock has dropped around 28% in 2022. The company’s market cap has fallen to $1.8 trillion.