Saudi Arabia Becomes The First Country To Approve Microsoft's Acquisition Of Activision Blizzard

Saudi Arabia, or officially known as the Kingdom of Saudi Arabia, is a country on the Arabian Peninsula in Western Asia.

Residing in the coastline along both the Red Sea and the Persian Gulf, most of its terrain consists of desert, lowland, steppe, and mountains. While its agriculture products aren't so plenty, it is completely self-sufficient in a number of foodstuffs, and is even able to export wheat, dates, dairy products, eggs, fish, poultry, fruits, vegetables, and flowers to markets around the world.

But what it exports the most, is petroleum.

As of October 2018, Saudi Arabia is the largest economy in the Middle East and the 18th largest in the world. Considered the "energy superpower," Saudi Arabia has the world's second-largest proven petroleum reserves, and the world's fifth-largest proven natural gas reserves. But in the world that is shifting towards green energy and technology, Saudi is diversifying its sources of revenue.

And among its sources, include investment in tourism, as well as on tech and gaming companies.

And because of this, Saudi Arabia has become the first country in the world to allow Microsoft's $68.7 billion acquisition of Activision Blizzard.

This decision was announced by the country's General Authority for Competition (GAC) in a tweet, saying that it has no objection to the completion of the "process of economic concentration" between the two companies.

The GAC didn't go into great details on how it came to that conclusion, but what is certain, Saudi Arabia's Vision 2030 plan aims to diversify the country's economy and wean it off its dependency on its renown huge reserves of oil.

And among the ways, include diversifying its income sources to also include the tech sector and video games.

With its investment, Saudi Arabia is looking forward for the acquisition to happen.

This is because if it's approved, Activision Blizzard would become a division of Microsoft Gaming, making Microsoft the third largest gaming company behind Tencent and Sony.

The Saudi government said that it expects the games industry to make up about 1% of its economy, which should be valued around $21 billion in 2030.

A relatively small sum for Saudi Arabia, but regardless, this can help it become less dependent on its petroleum exports.

While Microsoft gets the greenlight from Saudi Arabia, the American tech company needs to convince a lot of regulators around the world before the Activision Blizzard deal can go through.

The company needs to seek to assuage concerns to at least from over 100 consumer protection agencies, before the deal can be inked.

At this time, the FTC in the United States to CADE in Brazil, anti-competitive regulatory bodies across the world are still scrutinizing Microsoft's proposed acquisition.

It's worth noting the Saudi Arabia PIF (Private Investment Fund) owns 13.3% of Activision-Blizzard shares.

PIF has also purchased billions of dollars worth of shares in other video game companies.

They include: the Embracer Group, a Swedish video game and media holding company based in Karlstad; Electronic Arts, the American video game company headquartered in California; Take-Two Interactive, the American video game company based in New York City; and Nintendo, the Japanese multinational video game company headquartered in Kyoto.