Microsoft (MSFT) continues to face threats over the Activision deal


from Microsoft MSFT takeover deal activism blizzard ATVI is facing an antitrust complaint from the US Federal Trade Commission as it appears to be suing to block the $69 billion deal.

The deal is also under scrutiny outside the United States. The acquisition is under intense scrutiny in the UK, which has entered the second stage of review with the Competition and Markets Authority, as they believe the acquisition will harm competition in games consoles, subscription services and cloud gaming. Can cause damage if Microsoft refuses. To give competitors access to Activision’s best-selling games.

The EU had also launched a large-scale investigation in November. The EU competition enforcer said it would have until March 23, 2023 to decide whether to approve or block the deal.

Microsoft is vigorously fighting its legal troubles

This acquisition brought Microsoft into conflict not only with the authorities, but also with its competitors. Sony So does Sony, which also offers cloud gaming through its PlayStation Plus subscription. Sony expressed concern that the acquisition could influence people to switch from PlayStation to Xbox. Activision’s most popular game, the duty The series has been one of the best-selling games in its genre, and losing to Microsoft could take a lot of business away from Sony.

On the other hand, Microsoft has alleged that Sony pays developer blocking fees to prevent games from appearing on Xbox Game Pass and other competing subscription services.

Microsoft Corporation Values ​​and Consensus

Microsoft Corporation Values ​​and Consensus

Price Consensus Chart from Microsoft Corporation | quotes from Microsoft Corporation

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Microsoft has offered a ten-year contract to keep Sony duty on PlayStation, which goes far beyond the current contract. It also states that Sony’s PlayStation remains the market leader and that denying access to games would ultimately result in a loss of revenue for Microsoft.

Microsoft is also considering making the game available Nintendos NTDOY Nintendo Switch console, where the game is currently unavailable. If done successfully, it would help Nintendo promote its game line and attract players to its existing hit franchises, such as Brain Age, Kirby, Super Smash Bros, Pokemon and Mario.

This Zacks Rank #4 (sales) company has also demonstrated a willingness to cooperate with all relevant authorities when necessary to address their grievances.

On a positive note, Microsoft received approval from the Brazilian Competition Authority, as they stated that they operate in a very dynamic and competitive industry and that the merger would not harm competition in any way.

Saudi Arabia has also signed the agreement, but it is still awaiting major decisions from the US Federal Trade Commission and UK and EU officials.

This has somewhat relieved the company and its investors. Microsoft shares are down 26.4% year-to-date, outperforming the Zacks Computer & Technology sector, which fell 31.9% over the same period.

Microsoft could face potential conditions regulators impose on gaming deals, forcing them to keep them open for entry duty for a long time and make sure his rivals don’t get a lesser version. But if successful, the acquisition would be the largest acquisition in the technology industry’s history.

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