How It All Began – And Why It Mattered

This wasn't just a business deal but a bailout for Activision and a market power–-grab for Microsoft at the perfect legal moment. The actual trigger both Microsoft and Activision Blizzard wanted to buy TikTok in 2020 when the U.S. government was pushed ByteDance to divest its U.S. operations. Both companies failed, and this triggered Microsoft that they couldn't control the next frontier of mobile and social gaming.

Also, Microsoft was missing a significant IP in gaming. Game Pass grew then but didn't create a blockbuster franchise like Call of Duty or have a significant mobile presence. Meanwhile, Activision had solid content but faced credibility issues due to many lawsuits, employee walkouts, and several other problems.

Another critical point to mention here is the timing of the deal. When Microsoft entered the agreement due to its PR crisis, Activision's stock was undervalued, which was not a mere coincidence but a strategic move, making it a ripe target.

The $68.7 Billion all-cash acquisition wasn't merely a financial transaction; it worked for both Microsoft and Activision Blizzard. On one side, Microsoft received access to a powerhouse of IP in the gaming industry, including Call of Duty, Diablo, World of Warcraft, and Candy Crush, accelerating its ambitions in console, PC, mobile, and cloud gaming. It was a strategic leap into mobile markets through Activision's King division and a content-driven boost to Xbox Game Pass — essential for Microsoft's vision of a Netflix-style gaming model.

The Legal Maze: What Went Down with Regulators

This deal will be taught in law schools as a masterclass in regulatory navigation, where Microsoft used every possible remedy and global strategy to survive a multi-frontal war that went on for almost 20 months, is one of the most intense regulatory battles in recent M&A history. The deal had legal challenges in three significant Jurisdictions: the United States, the United Kingdom, and the European Union.

The FTC filed a complaint under Section 7 of the Clayton Act, arguing the lessening of competition in the market, and managed to get preliminary injunctions to halt the deal, but Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California in July 2023 denied the motion. In her ruling, the FTC failed to showcase the likelihood of harm to the competition, especially given that Microsoft entered into a binding agreement with Activision to have 10 years' access to titles like Call of Duty on rival platforms, including Sony and Nintendo. The court's view was that the remedies offered by Microsoft were sufficient to mitigate the risk of anticompetitive foreclosure.

Initially, the Competition and Markets Authority (CMA) in the United Kingdom blocked the transaction, showcasing serious concerns about Microsoft cornering the cloud gaming segment by having a first-mover advantage. However, Microsoft, to solve this barrier, restructured the deal and agreed to transfer the cloud streaming rights of Activision games to Ubisoft for a 15-year term. This restructuring remedy led to CMA reversing its decision and giving a green signal to the deal in October 2023.

The European Commission reviewed this deal under Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and approved it in May 2023. The commission approved the deal because Microsoft agreed not to withhold key Activision titles from the rival cloud services.

Microsoft's legal team went through a global antitrust landscape with a blend of restructuring and behavioral solutions – a sporadic and agile response in modern merger history.

The Secret Sauce: What Made the Deal Legally Smart

This deal sailed through wasn't just the deep pockets of Microsoft. Instead, their legal design thinking was the most brilliant move. The Ubisoft cloud gaming worked out. Instead of merely promising, Microsoft actually transferred the cloud steaming rights of those games for 15 years. With this move, Microsoft effectively removed itself from the accusation of "Monopoly" in the cloud gaming space.

Microsoft, in the urge to close this deal, moved proactively and didn't wait for the regulator to demand fixes; it went ahead and even signed 10-year public contracts with companies like Nintendo and NVIDIA, promising them that key titles like Call of Duty would stay on their platform only. This was the legal move to pre-empt foreclosure concerns, which was a crucial point raised in the FTC's case. The exclusivity issue was solved by contractually agreeing to make Call of Duty open for both Sony and Nintendo. Microsoft removed the talking point for both rivalries and the FTC.

Finally, Microsoft structured the deal very sharply by going for a share purchase rather than an asset purchase because doing so would get them the IP, Contracts, employees, and license without the need for renegotiations. Purchasing shares is smoother, faster, and often with lesser tax complications, especially in cross–border M&A.

So yes, Microsoft did manage to spend $68.7 billion, but what really sealed the deal was very strategic legal moves, every step carefully anticipating resistance and disarming it before it became a problem for them.

Behind Closed Doors: What Was Really Going On

Meanwhile, all the headlines were focused on the price of $68.7 Billion; there was a lot more happening behind closed doors, and honestly speaking, it was more like a corporate drama than a simple business deal.
Let's begin with Bobby Kotick, Activision Blizzard's CEO. He was under immense pressure due to lawsuits and workplace misconduct allegations. Even after all this, he stayed and closed the deal for a straightforward reason: pulling out a CEO at the time of a high-stakes acquisition could have caused chaos in the company. Microsoft needed him to keep things stable till the time of the complete handover, making this look great legally, operationally, and in the eyes of the media.

Not many people knew this before this deal between Microsoft and Activision Blizzard. Even EA (Electronic Arts) attempted to merge with Activision. The reasons for the deal not working out may be the unfavorable terms, or maybe Activision didn't trust EA to go through the same legal trouble that Microsoft went through and had a triumph returned. Either way, it clearly indicates that Activision wasn't just looking for a big cheque; instead, it was a way to clean all the mess they had created.

This is precisely what Microsoft did when they bought Activision out. It was quick and smooth and gave everyone, i.e., both Microsoft and Activision Blizzard, a fresh start, a new culture, a new owner, and new governance.

Meanwhile, Sony wasn't going to sit ideal; they were doing everything possible to sabotage the deal. Behind closed doors, they were pushing other companies to file complaints and raise concerns against the merger. Sony kept Call of Duty exclusive rights as their main argument, but Microsoft outplayed them by signing a 10-year-long deal with Nintendo and others. Hence, Sony saw defeat over there.
This showcases that this wasn't just about money; it was a perfect corporate drama recipe, a mix of politics, legal strategy, public image, and a bit of damage control.

What This Deal Really Taught Us?

This deal rewrote the M&A playbook. Honestly, it challenged regulators, lawyers, and companies to think about competition in the digital world.

For lawyers around the globe, the deal is a reminder that legal remedies can't just be merely promises anymore. Microsoft didn't keep its mouth quiet and accepted the law but went further and even restructured the deal itself; that's a whole new level of remedy design. In FTC vs Microsoft Corp (2023), the court denied the injunction because Microsoft's actions "undermined the FTC's concerns" (see Judge Jacqueline Scott Corley's ruling, U.S. District Court, N.D. California, Case No. 3:23-cv-02880-JSC).

For law students, this deal is a perfect textbook example of how antitrust law operates differently around the globe. In the U.S., they focus on consumer access, and in the U.K., it is all about cloud gaming. In the EU, it was all about license and monitoring obligations. Hence, one deal—three regulators, three lenses.

For business owners, this is a masterclass in timing. Microsoft moved the deal at the correct time when Activision Blizzard was vulnerable to costly lawsuits and PR disasters. It's like spotting a distressed house: you fix it, renovate it, and raise the property value.

Last, for everyone else in law, tech, or policy, this deal showed that it isn't just who owns the game but control of the platform, data, distribution rights, and digital ecosystem. The deal opened a new playbook for modern M&A: You need strategy, timing, and law on your side rather than just money.