Microsoft and Activision, the Newest Chapter in the Acquisition and Consolidation of Video Game Developers in the post-Covid World

By Connor Brophy

            With Covid came a large uptick in both the amount of people playing video games and the amount of time spent playing video games.[i] With the rise in gaming since 2020, also came drastic changes in the landscape of game developers and companies, with ten of the largest fifteen video game acquisitions of all time having occurred since 2020.[ii] These massive acquisitions include Sony’s acquisition of Bungie – the studio behind Destiny and early Halo games – for $3.7 billion in 2022,[iii] ByteDance’s, the Chinese parent company of TikTok,[iv] purchased of mobile game developer Moonton for around $4 billion in 2021, and Take-Two Interactive’s acquisition-merger of Zynga, maker of Farmville and Words With Friends, for $12.7 billion in 2022.[v] The most substantial of these post-Covid acquisitions, Microsoft’s pending purchase of Activision Blizzard for $68.7 billion, is the largest gaming transaction in history.[vi] Announced in January 2022, Microsoft would soon own Activision Blizzard’s stable of popular developers and games including Call of Duty, World of Warcraft, Candy Crush, and Overwatch.[vii] This deal was announced soon after the purchasee became the subject of scrutiny when a Wall Street Journal article highlighted Activision CEO Bobby Kotick’s failures in handling of the sexual harassment and a toxic workplace claims within the company, including a subpoena by the Securities and Exchange Commission.[viii]

            Microsoft’s deal raised immediate concerns including anti-competitive effects, antitrust risks, and the harms it might cause employees, including that of a new-found workers union within Activision.[ix] Quality assurance (‘QA’) testers at Activision subsidiary Raven Software, who work on the popular Call of Duty: Warzone title, had been attempting to unionize since 2021, to which Activision did not respond to their request for recognition of a union in January 2022.[x] With the Microsoft deal looming, questions arose on whether Microsoft, who has not historically been welcoming of worker unions, would continue Activision’s attempts to prevent the union at their pending subsidiary.[xi] In May 2022, the Raven Software QA testers voted to be in the union, the first union at a major video game studio in the U.S.[xii] That same month, the Head of Xbox, Phil Spencer, announced that Microsoft would recognize the newly founded union after the acquisition.[xiii] In the meantime, Activision recognized and began negotiating with the Communications Workers of America, the union representing the 27 Raven Software QA employees, back in June.[xiv]

            The much larger concerns for the acquisition comes from the Federal Trade Commission and a UK antitrust probe. Shortly after the announcement, it was reported that the FTC would be handling the antitrust review of the proposed acquisition.[xv] The FTC’s main concern is the impact the deal will have on workers in the industry, whether Microsoft is planning anti-competitive behaviors like shutting out popular Activision games from Sony and Nintendo’s consoles, and increased data privacy and surveillance advertising concerns.[xvi] Even with these concerns, the FTC is reported to be close to approving the deal, waiting on a request that both companies provide extensive data regarding the planned acquisition.[xvii]

While the FTC is close, the U.K.’s Competition and Markets Authority (‘CMA’) announced recently that it plans to open a more in-depth probe of the deal.[xviii] According to the CMA, they are concerned that “’Microsoft could use its control over popular games like ‘Call of Duty’ and ‘World of Warcraft’ post-merger to harm rivals, including recent and future rivals in multigame subscription services and cloud gaming.’”[xix] This so called second phase of the investigation will “involve an independent panel looking at the deal in more depth, building on evidence and work from the first phase.”[xx] Microsoft has committed to Sony to make games like Call of Duty available on PlayStation into the future, but these are not regulatory consent decrees and may not be enforceable.[xxi] Pending approval, the Microsoft $69 billion in an all-cash deal to acquire Activision Blizzard is expected to close by June 2023.[xxii]

            With all these acquisitions, it was no surprise to hear Electronic Arts in the news this month, with rumors swirling of a pending acquisition by Amazon.[xxiii] With a market cap at about $35 million, slightly more than half of that of Activision, this would most likely be the second largest gaming deal in history.[xxiv] However, these rumors turned out to be incorrect.[xxv] With the current space of developer acquisitions, this type of deal involving EA might be coming to a newsstand near you in the not so distant future.[xxvi]

[i] See generally 3, 2, 1 Go! Video Gaming is at an All-Time High During COVID-19, Nielsen (June 2020),; Mike Snider, Two-thirds of Americans, 227 Million, Play Video Games, USA Today (July 13, 2021, 4:03 PM),

[ii] Anshool Deshmukh, Visualizing the Biggest Gaming Company Acquisitions of All-Time, Visual Capitalist (Feb. 3, 2022),

[iii] Adam Bankhurst, Sony Has Completed Its $3.7 Billion Deal to Acquire Bungie and Welcome It Into the PlayStation Family, IGN (July 16, 2022),

[iv] Pei Li et al., ByteDance Acquires Gaming Studio Moonton at Around $4 Billion Valuation: Sources, Reuters (Mar. 22, 2021, 1:00 AM),

[v] Aisha Malik, Take-Two completes $12.7B acquisition of mobile games giant Zynga, TechCrunch (May 23, 2022),

[vi] Benjamin Horney, Why Microsoft’s $68.7B Activision Play Will Probably Succeed, Law360 (Jan. 19, 2022, 7:09 PM),

[vii] Cara Lombardo et al., Microsoft to Buy Activision Blizzard in All-Cash Deal Valued at $75 Billion, Wall St. J. (Jan. 18, 2022, 5:48 PM),

[viii] Kirsten Grind, Activision CEO Bobby Kotick Knew for Years About Sexual-Misconduct Allegations at Videogame Giant, Wall St. J. (Nov. 16, 2021),

[ix] Lewis Gordon, The Great Consolidation of the Video Game Industry, The Ringer (Aug. 19, 2022, 6:00 AM),

[x] Shannon Liao, Raven Software Union Moves to Vote Absent Activision Blizzard Recognition, Wash. Post (Jan. 25, 2022, 8:36 PM),

[xi] Id.; Amanda Silberling, Activision Blizzard Won’t Voluntarily Recognize the Historic Raven Software QA Union, TechCrunch (Jan. 26, 2022, 11:10 AM),

[xii] Tim Ryan, Unions Look to Level Up With Video Game Worker Campaigns, Law360 (Aug. 25, 2022; 9:11 AM),

[xiii] Sisi Jiang, Xbox Boss Says He Will Recognize Raven Software’s Union After Acquisition Closes, Kotaku (May 26, 2022, 3:05 PM),

[xiv] Doyinsola Oladipo, Activision Blizzard Recognizes New “Call of Duty” Workers Union, Reuters (June 10, 2022, 2:37 PM),

[xv] David McLaughlin, Microsoft Deal for Activision to Be Reviewed by FTC in U.S., Bloomberg (Feb. 1, 2022, 10:52 AM),

[xvi] Bryan Koenig, Groups Raise ‘Red Flags’ On Microsoft $69B Activision Play, Law360 (Mar. 1, 2022),

[xvii] Kyle Campbell, Microsoft’s Acquisition of Activision Blizzard Might be Approved Next Month, USA Today (July 18, 2022, 4:47 PM),

[xviii] Dawood Fakhir, Microsoft Faces In-Depth UK Antitrust Probe Over $69B Deal, Law360 (Sept. 1, 2022, 6:23 PM),

[xix] Id.

[xx] Id.

[xxi] Id.

[xxii] Jordan Novet, As Microsoft Rallies, Activision Blizzard Sinks to Lowest Price Since Deal News, CNBC (Apr. 27, 2022, 4:10 PM),

[xxiii] Patrick Dane, If Amazon Buys EA, it’s Much Scarier than Microsoft Buying Activision, TechRadar (Aug. 28, 2022),

[xxiv] Id.

[xxv] Paul Tassi, Amazon’s Not Buying EA, But Should It? Should Anyone? Forbes (Aug. 28, 2022, 9:41 AM),

[xxvi] Id.