We’ve come a long way from Pong, the table-tennis video game released by Atari in 1972. It was way cool then yet primitive by today’s standards, or even the standards of next-generation ‘80s games such as Galaga, my favorite.

Now, in paying around $70 billion for Activision Blizzard, Microsoft shows the gaming industry has come of age and then some. Activision is best known for its wildly popular “Call of Duty” and “World of Warcraft” games.

It’s Microsoft’s largest acquisition ever — and all in cash, a sign of the Redmond giant’s financial heft. This is the largest cash-only deal of all time, according to Dealogic.

Microsoft means to be a big part of this industry. It means to lead it or come close. If the deal is approved by regulators, Microsoft would become the third-largest video gaming company, behind China’s Tencent and Japan’s Sony as measured by revenue.

As Bloomberg’s Dina Bass laid out, the acquisition would also vault Microsoft into mobile, the fastest-growing segment of the industry. Activision’s mobile-gaming studio King created Candy Crush, which is one of the most popular mobile games in history.

Microsoft would also be able to reach gamers directly, bypassing Apple and Google with their app store fees.

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And the deal fits with Chief Executive Satya Nadella’s emphasis on “the three C’s” — cloud, content and creators. Folding Activision’s past and future content into its cloud gaming service, plus Xbox Game Pass, will add subscription revenue and “a pool of players creating their own gaming content and worlds.”

“Together with Activision Blizzard, we have an incredible opportunity to invest and innovate, to create the best content, community and cloud for gamers to build substantial new value for our shareholders,” Nadella said on an investor and media call Tuesday.

Under Nadella and the help of this deal, Microsoft is positioned to avoid experiencing any more lost decades.

The deal faces potential headwinds.

The National Labor Relations Board is investigating Activision for a complaint by the Communications Workers of America union. “The employer has threatened employees that they cannot talk about or communicate about wages, hours and working conditions,” according to a copy of the complaint obtained by the Los Angeles Times.

The Wall Street Journal reported in November that Activision CEO Bobby Kotick knew about sexual misconduct allegations, including alleged rapes, and failed to inform his board. (Among the reporters was Seattle Times alum Kirsten Grind). This followed a lawsuit against the company for sexual bias by California regulators. The Securities and Exchange Commission is also investigating,

All this put pressure on Activision directors to find a merger partner. But it leaves Microsoft with a mess to clean up. And not only at Activision.

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As my colleague Lauren Rosenblatt reported, Microsoft is facing its own allegations of sexual harassment and discrimination, including against co-founder Bill Gates. The company recently hired an outside law firm to review its practices and hold employees and top executives accountable. Pressure to address the problems is coming from shareholders.

Another challenge will be facing antitrust scrutiny, something given a priority by the Biden administration. Big Tech is among the sectors in the gunsights.

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On the same day Microsoft announced its blockbuster deal, the Justice Department and Federal Trade Commission sent out a notice “Aimed at Modernizing Merger Guidelines to Better Detect and Prevent Anticompetitive Deals.”

It cited evidence that industries are becoming more concentrated and less competitive. Merger filings doubled between 2020 and 2021.

“Illegal mergers can inflict a host of harms, from higher prices and lower wages to diminished opportunity, reduced innovation and less resiliency,” FTC Chair Lina Khan said in the document soliciting public input.

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“This inquiry launched by the FTC and DOJ is designed to ensure that our merger guidelines accurately reflect modern market realities and equip us to forcefully enforce the law against unlawful deals,” Khan said. “Hearing from a broad set of market participants, especially those who have experienced first-hand the effects of mergers and acquisitions, will be critical to our efforts.”

Bloomberg reported that Kotick and his board weren’t sure Microsoft wasn’t the right merger partner. In the end, however, the board unanimously approved the deal. And in an interview on the GamesBeat website, Kotick said Microsoft was “clearly the best partner.”

Working in Microsoft’s favor with regulators is that the deal would still give Microsoft only about 15% of the video gaming market.

Another plus: Among Big Tech, Microsoft is the least-hated company.

Fortune magazine reported that if the deal was scuttled, Microsoft would pay Activision $2 billion if it fell through before Jan. 18, 2023; $2.5 billion if it happens between Jan. 18 and April 18 and $3 billion anytime after April 18 of next year. At the same time, Activision will owe Microsoft $2.27 billion if it accepts a better offer.

Thus, for all the headlines about the groundbreaking deal and its consequences for the murky “metaverse,” it’s not a sure thing. Likely, but not guaranteed.