Xbox's potential acquisition of Activision Blizzard has received a major boost following the shareholder's meeting on April 28. There were some rumors from Wall Street that the deal might not go through, based on share prices.
However, reality has been quite different as 98% of the shareholders voted positively and gave a green signal to the potential acquisition. The job is not done, though, as all parties involved will have to work with regulatory authorities, particularly the Federal Trade Commission (FTC).
Xbox needs FTC approval after 98% of Activision Blizzard shareholders green-light the acquisition
Earlier in 2022, Xbox announced its plans to take over Activision Blizzard in a deal worth a whopping $70 billion offer. If the deal eventually goes through, it will be one of the largest takeovers in terms of valuation.
Since the potential deal was announced, there have been different speculations from many sources. While some felt that the deal would have no blockades, others have been less than convinced.
The first barrier has now been removed, with the shareholder votes going in favor of Xbox. This was more or less expected given the valuation at which the gaming giants will buy Activision Blizzard. Getting the approval of the regulatory authorities will be another matter.
Given the scale of the deal, it has to go through the Federal Trade Commission. The FTC will mainly be reviewing the antitrust part of the deal, which is also along common grounds.
One fear that some have over this approval is that the FTC has blocked NVIDIA's potential acquisition of chipmaker Arm in the past. When looked at closely, there are clear differences.
For starters, much of the investigation over that deal was done in the UK. The FTC had followed the investigations in handing out its judgments. It should also be noted that the deal was canceled on grounds more serious than antitrust as security and privacy issues were at play.
One area the FTC will look at is the potential power consolidation that might happen in case of a takeover. This will largely depend on Xbox's decisions with Activision Blizzard's IPs like Call of Duty.
If Call of Duty becomes exclusive (which hasn't been declared yet), it's hard to say if there will be a consolidation. PlayStation has several unique IPs that are some of the best sellers in the gaming scene. While Call of Duty becoming exclusive will hurt it, PlayStation will still have enough.
Among other things, there's Nintendo, which has its own set of video games and consoles. It has created its fan base, which is unlikely to change with what happens between Activision Blizzard and Xbox. According to Xbox Wire, the company will be the third-largest gaming entity after Sony and Nintendo once the deal goes through.
It's quite unlikely that the FTC will find any major problems with the deal. To draw parallels, Disney's acquisition of Fox was a much bigger deal that could lead to power consolidation. However, that doesn't mean that Xbox should rest easy right now.
Along with FTC approval, the company will also require the approval of the SEC. The latter will protect the interests of investors and shareholders. Then there will be an onus on Xbox to show what they're willing to do with the workforce at Activision Blizzard.
Despite clearance of the first blockade, the road is yet to become smooth for Microsoft. However, Phil Spencer and co. have repeatedly expressed their confidence in the deal.