Korea grants unconditional approval to MS’s acquisition of Activision Blizzard

Activision Blizzard Inc.’s game “Diablo” [Photo provided by Blizzard]

South Korea’s antitrust regulator said Tuesday it has decided to grant unconditional approval to Microsoft Corp.’s acquisition of global game development company Activision Blizzard Inc. as the deal is unlikely to limit competition in the local gaming market.

Microsoft signed a $68.7 billion deal to acquire Blizzard in January last year and subsequently filed for merger approval with Korea’s Fair Trade Commission (FTC) in April of the same year.

The acquisition is a major M&A deal for Microsoft, as it combines its console (Xbox) and cloud gaming services with Blizzard’s popular games.

Once the acquisition receives final approval from antitrust authorities around the world, it will become the largest-ever deal in the U.S. information technology industry.

Blizzard is a company known for developing popular games such as “Diablo” and “Call of Duty” and boasts a user base of 400 million gamers worldwide.

Microsoft develops and distributes games such as “Minecraft,” “Forza Horizon,” and “Elder Scrolls,” while selling the Windows operating system for PCs. Microsoft also provides console and cloud gaming services.

The FTC said that it does not foresee Microsoft exclusively supplying Blizzard’s key games only to its own platforms, nor does it anticipate significant foreclosure that would exclude competitors from the market. It cited Sony’s PlayStation that holds a significant market share over Xbox in Korea.

Even if Microsoft were to implement any restrictive measures, it would have minimal impact on competition, the FTC said.

In 2021, PlayStation held a market share of 70-80 percent, while Nintendo accounted for 10-20 percent, and Xbox 0-10 percent, based on game sales figures.

British competition authorities, however, had rejected the acquisition in April due to concerns about competition limitations in the cloud gaming service market.

U.S. authorities also expressed concerns about potential competition restrictions in the console and cloud gaming service markets and filed a lawsuit in federal appeals court in December last year.

In contrast, Japan unconditionally approved the acquisition, while the European Union approved it with the condition that Blizzard provides its content to other rival cloud platforms.