Microsoft’s $69 billion acquisition of video game maker Activision Blizzard (held by the Fund) received a significant boost in July, with U.S. courts allowing the merger to proceed and denying the Federal Trade Commission’s (FTC) appeal to temporarily stop closure of the deal.¹

A federal judge ruled in July that the FTC failed to demonstrate that Microsoft’s ownership of Activision would harm competition in the console or cloud-gaming markets and would, in fact, increase consumer access to Activision content, such as the immensely popular “Call of Duty” series.² This decision was later held up on appeal.

In response to the denial of their appeal, the FTC moved to cancel its in-house administrative challenge to Microsoft’s Activision Blizzard deal, which was slated to go before a judge in August. It is important to note that such a challenge could be re-filed at some point in the future, and the FTC still has a pending appeal of the denial of its preliminary injunction.³

The only remaining hurdle to the deal is the Competition and Markets Authority (CMA) in the United Kingdom. Having initially blocked the acquisition in April, the CMA remains the loan regulator holdout after the Microsoft-Activision deal received approval in every other jurisdiction.

At the end of July, Microsoft submitted a change of circumstances document to the CMA, arguing that the regulator should take a second look at the proposed acquisition. Microsoft wants the CMA to take into consideration Microsoft’s cloud gaming agreements with Nvidia, Boosteroid, and others made since the deal’s initial rejection, a deal with Sony to keep “Call of Duty” available on PlayStation post-acquisition,4 and material included in the FTC case that Microsoft contends addresses all the CMA’s previous concerns about the deal and potential anti-competitive impacts.

Source: Activision/Blizzard/CallofDuty

The CMA is expected to render a decision by the end of August, and Microsoft and Activision Blizzard have mutually agreed to push the closing date of the deal back to October 18 in case they need time to address any additional concerns from the U.K. regulator.5


Company Specific Updates

Activision Blizzard Inc

Activision Blizzard reported impressive financial results for Q2. Net bookings saw 50% year-over-year growth, while both GAAP operating income and segment operating income experienced over 70% YoY growth.

Source: Activision/Blizzard/CallofDuty

The “Call of Duty” franchise contributed to the 17% year-over-year growth in the company’s Activision segment revenue, and operating income saw an impressive increase of over 80% YoY.

Meanwhile, Blizzard segment revenue demonstrated growth of over 160% year-over-year, with operating income more than tripling year-over-year, primarily due to the successful launch of Diablo IV. The success of Diablo IV helped Blizzard achieve its first $1 billion net bookings quarter, setting a new record for segment operating income.6


Electronic Arts Inc

Electronic Arts revealed its first game under its new EA SPORTS FC brand in July, entitled EA SPORTS FC24. Set to launch globally on September 29, 2023, the game’s cover star is Manchester City striker Erling Haaland, who made a surprise appearance during the unveiling event in Amsterdam alongside soccer legends Didier Drogba, Luis Figo, Laura Georges, and Alex Scott.

Source: ElectronicArts

EA SPORTS FC24 introduces three innovative technologies, including HyperMotion V, which uses real match data from over 180 professional matches in both men’s and women’s football to deliver ground-breaking, realistic football movement and gameplay.

The game also marks a world-first by combining men and women footballers on the same pitch. Early access to EA SPORTS FC 24 will be available September 22, 2023, through the Ultimate Edition, and the game will launch on various platforms, including PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, PC, and Nintendo Switch a week later.7


HERO ETF: Diversified Investing in eGaming

Interested in a diversified approach to investing in video games? Canada’s first esports and gaming ETF, the Evolve E-Gaming Index ETF (HERO ETF), is an index-based exchange-traded fund that invests in the leading video game companies across the globe. For more information about the Evolve E-Gaming Index ETF or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Portfolio Strategy and Activity

For the month, NetEase Inc made the largest contribution to the Fund, followed by Activision Blizzard Inc and Electronic Arts Inc. The largest detractors to performance for the month were Krafton Inc, followed by Bandai Namco Hldgs, and Roblox Corp. On last rebalance, these securities were added to the portfolio: Soft-World International Corp, Gamania Digital Entertainment Co Ltd, Archosaur Games Inc, AppLovin Corp, Playstudios Inc, and Rovio Entertainment Oyj.



  1. Novet, J., “FTC loses appeals court bid to temporarily block Microsoft-Activision deal,” CNBC, July 15, 2023;
  2. Needleman, S. & Michaels, D., “Microsoft Can Close Its $75 Billion Buy of Activision Blizzard, Judge Rules,” July 11, 2023;
  3. Warren, T. & Lawler, R., “FTC withdraws its in-house challenge to Microsoft’s Activision Blizzard deal,” The Verge, July 20, 2023;
  4. Novet, J. & Goswami, R., “Microsoft and Sony sign deal to keep Activision’s Call of Duty on PlayStation,” July 16, 2023;
  5. Warren, T., “Microsoft argues its Activision Blizzard case with UK regulators,” July 31, 2023;
  6. “Activision Blizzard Announces Second Quarter 2023 Financial Results,” Activision Blizzard, July 19, 2023;
  7. “Electronic Arts Sets out Vision for EA SPORTS FC™ and Reveals First Look at EA SPORTS FC™ 24 Gameplay,” Electronic Arts, July 13, 2023;
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