Microsoft's $69B Activision Blizzard Deal Officially Clears Final Legal Hurdle

A US federal appeals court has rejected the Federal Trade Commission's (FTC) attempt to challenge Microsoft's $69 billion purchase of Activision Blizzard King.

This latest ruling likely ends the years-long legal battle over the biggest deal in gaming history.

The 9th U.S. Circuit Court of Appeals denied the FTC's appeal on Wednesday in a detailed 40-page ruling. The three-judge panel found that the original court decision from July 2023 followed "proper legal procedures." They also determined that the FTC failed to prove the merger would harm competition in the gaming market.

"Given the FTC's failure to make an adequate showing as to its likelihood of success on the merits as to any of its theories, the district court properly denied the FTC's motion for a preliminary injunction," the ruling stated.

According to the document, the FTC couldn't demonstrate that Microsoft would block competitors from accessing popular titles like Call of Duty. The ruling also found insufficient evidence that the merger would damage competition in cloud gaming services.

The legal battle began shortly after Microsoft announced its intention to buy Activision Blizzard in early 2022. Regulators worldwide scrutinized the deal for over 18 months before Microsoft finally completed the purchase in October 2023. This happened after U.S. Judge Jacqueline Scott Corley initially rejected the FTC's request for an injunction to block the merger. Despite this setback, the FTC vowed to continue its challenge. However, with this latest appeals court decision, legal experts believe the case against Microsoft is effectively over.

The ruling acknowledges that exclusivity is common practice in the gaming industry. As noted in the court documents, "All major manufacturers have engaged in this practice." The judges pointed out that "Nintendo and Sony both have significantly higher number of exclusive games on their platform than Microsoft does."

Since completing the acquisition, Microsoft has already begun integrating Activision Blizzard games into its Xbox Game Pass service. Popular titles like Call of Duty, Diablo 4, and Overwatch 2 are now available to subscribers.

The merger also strengthens Microsoft's position in mobile gaming through Activision's King division, which creates games like Candy Crush. This could prove valuable for Microsoft's delayed plans to open its own mobile game store.

Bloomberg Law reports that this ruling will likely reshape how the FTC reviews deals involving rapidly evolving technology sectors in the future. The administrative trial in the FTC's in-house court had been put on hold pending this appeal's outcome, and it's now expected to be dismissed.

With this legal hurdle cleared, Microsoft can fully focus on leveraging its new assets across Xbox consoles and Windows PC systems, potentially creating exclusive titles while continuing to make major franchises available on competing platforms as promised during the legal proceedings.