By SARAH PARVINI Los Angeles Times/TNS
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Microsoft acquired gaming giant Activision Blizzard on Friday, closing the biggest deal in video game history after more than a year of close scrutiny from antitrust officials around the world.

The announcement came after Microsoft cleared a final regulatory hurdle to the deal from Britain’s competition watchdog.

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The $69 billion purchase of Santa Monica-based Activision Blizzard makes Microsoft the third-largest gaming company in the world by revenue, behind China’s Tencent and Sony in Japan.

First announced in January 2022, the deal faced heavy scrutiny from regulators in the European Union, United States and United Kingdom who argued that the acquisition could raise prices for gamers and harm competition in the gaming industry, including in cloud-based gaming. In total, more than a dozen countries reviewed the acquisition.

Microsoft President Brad Smith said in a statement the combination “will benefit players and the gaming industry worldwide.”

The purchase, seen as a test of whether international regulators would approve such blockbuster tech deals, comes as the growing global games market is expected to generate nearly $188 billion in revenue in 2023 — up 2.6% from last year, according to Amsterdam-based industry tracker Newzoo.

In an email to staff, Activision Blizzard Chief Executive Bobby Kotick said that he would stay with the company through the end of the year.

“Combining with Microsoft will bring new resources and new opportunities to our extraordinary teams worldwide,” Kotick said. “It will also enable us to deliver more fun, more joy, and more connection to more players than ever before.”

Microsoft’s bid is part of a years-long consolidation trend in the video game industry that has shifted power away from game makers into the hands of platform holders, said Joost van Dreunen, author of “One Up: Creativity, Competition, and the Global Business of Video Games.”

“Microsoft is trying to redraw the boundaries or the definition of what the games industry looks like,” van Dreunen said. “In a conventionally sort of console-based universe, they now have console, PC, mobile and the cloud. It allows them to compete on their strengths.”

In purchasing Activision Blizzard, Microsoft will boost its mobile gaming presence by adding “Candy Crush” and “Call of Duty Mobile” to its arsenal at a time when mobile is gaming’s most significant segment by consumer spending.

With the acquisition complete, Microsoft said that it will begin the process of making Activision, Blizzard and King’s library of games available on Xbox’s Game Pass and other platforms.

Van Dreunen said that closing the deal could have a ripple effect across the industry, leading other corporations to look at what they might be able to acquire in order to compete.

“What’s going to happen to Electronic Arts? It’s worth $35 billion. That’s nothing compared to what they are about to close,” he said, referring to the Redwood City, Calif.-based video game company. “I would not be surprised if the top 10 companies in the games industry, five years from now, would be exclusively platform holders.”

The industry’s landscape has vastly changed over the last decade, he said. Several large companies — including Microsoft — acquired other game studios over the course of the pandemic, when the industry skyrocketed as people stayed home.

Microsoft announced its plan to acquire gaming company Zenimax for $7.5 billion in 2020. Two years later, Sony purchased game developer Bungie for $3.6 billion, while Take-Two Interactive bought mobile game giant Zynga for $12.7 billion. Microsoft revealed it would buy Activision Blizzard that same year.

The move came amid a crackdown on tech mergers by U.S. Federal Trade Commission Chair Lina Khan, who has opposed the Activision acquisition. But a federal judge in San Francisco ruled earlier this year that the FTC hadn’t shown that the deal would harm competition for gaming. Instead, the court said, evidence pointed to the deal granting more consumer access to games by keeping Activision’s popular “Call of Duty” series on PlayStation for 10 years, agreeing with Nintendo to bring “Call of Duty” to Switch and signing deals to bring Activision’s content to several cloud gaming services for the first time.