Microsoft has made its biggest purchase ever as bosses announced the takeover of gaming company giant Activision Blizzard.
The company, who produce the Xbox console, will pay $68.7billion (£50.5bn) in cash for the studio, which is famed for the Call of Duty series and Candy Crush Saga.
The move comes as a shock to gaming fans, with Microsoft attempting to expand its gaming division ahead of a move into the ‘metaverse’.
However, the UK’s competition regulator The Competition and Markets Authority (CMA) has raised concerns over the deal.
But what exactly will the takeover mean for both Microsoft and Activision Blizzard and why has the takeover happened?
Why has Microsoft taken over Activision Blizzard?
The purchase of Activision Blizzard come as Microsoft has made move to expand their gaming division.
Bosses are looking to strengthen the gaming arm of Microsoft, with the future of the gaming industry on their minds.
With an expected move to the ‘metaverse’ and gaming within this field, the company are keen to secure their reputation in the virtual reality field.
Satya Nadella, Microsoft’s chair and chief executive, said: “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.
“We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”
Phil Spencer, CEO of Microsoft Gaming, added: “Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them.
“Together we will build a future where people can play the games they want, virtually anywhere they want.”
What is the metaverse?
The metaverse has become a well-used term within the technology industry over the past few years, and looks set to increase in popularity with the next generation of gaming.
Most recently - and most prominently - Facebook announced their intentions to develop new products which will create a ‘metaverse’ for users, going so far as to change the company name from Facebook to Meta.
Essentially, the metaverse is an online space, which often makes use of virtual reality products, with a focus on social interaction.
Users can use virtual reality products such as a VR headset to access the metaverse, which is presented in a 3D world.
The network is set to become the next biggest thing in next generation gaming.
What does the takeover mean for both companies?
The move will see Microsoft become the third biggest gaming company in the world by revenue, behind Chinese company Tencent and PlayStation creator Sony.
Acquiring Activision Blizzard will mean that Microsoft now has 30 game development studios - including Bethesda, which Microsoft acquired in 2021.
Games made by the studio could be available exclusively on the Xbox console and Xbox and Microsoft Game Pass.
Huge franchises which could make the move includes Call of Duty, World of Warcraft, Overwatch and Diablo.
Activision Blizzard will continue to create its well-loved games.
The game studio has recently been at the centre of scandal, after employees made accusations of sexual harassment and toxic workplace culture at the company.
Activision Blizzard bosses recently fired around 30 employees and disciplined another 40 in relation to the claims.
Bobby Kotick will remain CEO of the studio after the takeover, which is expected to be completed by the end of 2023.
He said: “For more than 30 years our incredibly talented teams have created some of the most successful games.
“The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”
What has the Competition and Markets Authority said?
The CMA has warned both Microsft and Activision Blizzard that the proposed deal could “substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services”.
The regulator added: “Microsoft already has a leading gaming console (Xbox), a leading cloud platform (Azure), and the leading PC operating system (Windows OS), all of which could be important to its success in cloud gaming.”
Although the concerns have not prevent the sale so far, the CMA have given both companies five days to address the concerns and submit a proposal.
If these proposals are not accepted by the regulator, it will move the deal into phase two of investigation.
This would mean than an independent panel of experts will take a closer look at the deal.