Significant progress! Is the EU giving the green light that the Microsoft Blizzard acquisition case is about to be completed?

Tech 2023-05-18 06:17:56 Source: Network

Author: Hernanderz Supervised by: Luo ChaoIt has been more than a year since Microsoft announced its $68.7 billion acquisition of Activision Blizzard, and the two sides still have not been able to achieve their desired combination

Author: Hernanderz Supervised by: Luo Chao

It has been more than a year since Microsoft announced its $68.7 billion acquisition of Activision Blizzard, and the two sides still have not been able to achieve their desired combination. The strict scrutiny by regulatory agencies in various countries has added a lot of uncertainty to this century marriage. But in recent days, there have finally been some breakthroughs.

On May 15th, the European Commission announced approval for Microsoft's acquisition of Activision Blizzard.According to official announcements, the EU believes that this transaction will not create a monopoly in the gaming market or disrupt market competition. Microsoft has previously promised the European Union that after acquiring Blizzard, it will provide 10 years of free licensing to European consumers and will not refuse to sell Blizzard games to competitors such as Sony.

Outside the European Union, Microsoft and Activision Blizzard are also prepared to raise the above issue in response to the ruling of another important opposition force, the UK Competition and Market Authority. However, it is not easy for Microsoft and Blizzard to overcome this hurdle. After the EU's decision was made, the UK Competition and Market Authority also issued a statement condemning the former for making a "wrong decision" and maintaining its opposition stance. However, obtaining EU approval is a good start.

Accelerating the acquisition process, Microsoft and Blizzard naturally have their own considerations.

From the latest financial report, the performance of Microsoft's gaming business is not ideal.According to the financial report for the third quarter of the 2023 fiscal year (the first quarter of 2023), the total revenue of Microsoft's gaming business decreased by 4% year-on-year to $3.59 billion. Among them, hardware revenue plummeted by 30%, the lowest level since the launch of the XboxSeries series of hosts in 2020. On the contrary, the revenue from content and service businesses increased by 3%, mainly due to the growth of XboxGamePass.

The decline in hardware sales revenue is closely related to a series of objective factors such as supply chain crisis and production capacity decline, but it also indicates that user novelty is declining, and Microsoft needs to provide new incentives to consumers as soon as possible.In Microsoft's revenue chart, the gaming business has always held a high position, and being able to receive support from Blizzard is crucial for its future development.

From the perspective of Blizzard, the current performance is not bad, but there are also many troubles.

Data shows that Activision Blizzard's total revenue in the first quarter of this year was 2.383 billion US dollars, higher than the same period last year's 1.768 billion US dollars; The net profit recorded $740 million, a year-on-year increase of 87%. From the perspective of revenue structure, the revenue of product sales business has nearly doubled, making it the biggest contributor to both revenue and profit growth.

However, since breaking up with NetEase, Activision Blizzard has still not found a successor in this huge market in China. At the same time, its monthly active users in the first quarter decreased from 371 million in the same period last year to 368 million, and its popularity is facing multiple tests.By joining Microsoft, Activision Blizzard can receive more development funds and technical support, which is beneficial and harmless for its product research and development.

Of course, the acquisition case has not yet been settled, and everything is still uncertain. But for Microsoft and Activision Blizzard, their determination to unite has never wavered, and they also greatly need each other's assistance.

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