LONDON: Saudi Arabia’s General Authority for Competition is the first international regulatory body to approve Microsoft’s takeover of the video game company Activision Blizzard.
The GAC “issued a No Objection Certificate with respect to the completion of the economic concentration transaction between Microsoft Corporation and Activision Blizzard, Inc.” on Sunday, becoming the first regulatory body in the world to announce its approval.
In January, Xbox maker Microsoft announced plans to acquire Activision Blizzard for $68.7 billion. If approved, the merger will create one of the world’s largest video game companies while allowing the tech giant to compete with rivals such as Meta in creating immersive virtual worlds.
The acquisition is being scrutinized by other international authorities, who will assess if it conforms with competition rules.
The deal, which is waiting for approval from US and European internet regulators, is expected to be the most expensive video game acquisition in history and the third biggest corporate deal of the decade.
But it has also been criticized.
Sony, the maker of PlayStation and one of Microsoft’s direct competitors, recently said the proposed acquisition would create a publishing clash and eventually lead to Microsoft holding a monopoly over the market due to the massive popularity of Activision Blizzard’s “Call of Duty” franchise.
In a letter filed to Brazilian authorities, it said: “Call of Duty is so popular that it influences users’ choice of console, and its community of loyal users is entrenched enough that even if a competitor had the budget to develop a similar product, it would not be able to rival it.”
Microsoft’s head of gaming revealed the company had no intention to remove “Call of Duty” from the PlayStation platform and expected the game to remain multiplatform due to “contractual agreements.”
Activision Blizzard has also been at the center of intense criticism having been buffeted for months by allegations of misconduct and unequal pay.
Earlier this year, the company was hit with a sexual harassment lawsuit, which further exposed its workplace culture to intense scrutiny. Last year, an employee committed suicide while on a company retreat.
Saudi Arabia’s Public Investment Fund has a great interest in the deal, having previously acquired stakes in Activision Blizzard as part of its effort to diversify the country's investment beyond oil. After Microsoft announced the deal, the sovereign wealth fund enjoyed a $1.1 billion boost in its investment in the video game producer.
The Saudi government is betting heavily on the gaming industry.
The Kingdom this year hosted Gamers8, the biggest esports and gaming event worldwide. It expects the sector will make up about 1 percent of its economy—for a value of around $21 billion—by 2030.