Microsoft Just Overcame A Major Hurdle Blocking The Activision Deal

Microsoft Just Overcame A Major Hurdle Blocking The Activision Deal

Microsoft’s $US69 ($96) billion deal to buy Activision Blizzard inched closer in a big way on Friday. UK regulators announced a provisional finding that the acquisition wouldn’t harm competition, despite previously suggesting the Xbox maker might need to spin-off the Call of Duty business to get the sale approved.

The UK’s Competition and Markets Authority was initially sceptical of Microsoft’s promises to keep the military shooter available on PlayStation consoles for many years to come, arguing it could have a financial incentive to pull the blockbuster series from the platform in the future. The CMA now says that after receiving more detailed information about Call of Duty player spending, it’s clear that making the series exclusive to Xbox would lose Microsoft a ton of money.

“The CMA inquiry group has updated its provisional findings and reached the provisional conclusion that, overall, the transaction will not result in a substantial lessening of competition in relation to console gaming in the UK,” it wrote in a press release. The CMA continued:

While the CMA’s original analysis indicated that this strategy would be profitable under most scenarios, new data (which provides better insight into the actual purchasing behaviour of CoD gamers) indicates that this strategy would be significantly loss-making under any plausible scenario. On this basis, the updated analysis now shows that it would not be commercially beneficial to Microsoft to make CoD exclusive to Xbox following the deal, but that Microsoft will instead still have the incentive to continue to make the game available on PlayStation.

The CMA is still reviewing Game Pass

The regulatory agency is still investigating the cloud gaming side of the deal, with its final verdict/decision still not due out until 26 April. Call of Duty seemed to be the biggest sticking point in the CMA’s scepticism of the deal, however, and Microsoft seems to have now tentatively assuaged those fears. It’s also been busy shoring up its defence on the cloud gaming front by striking deals with several smaller competitors to guarantee its first-party games will be available on other services if the deal goes through.

One big question that remains is what a final deal between Microsoft and Sony will look like. An Activision spokesperson had previously claimed that Sony Interactive Entertainment CEO Jim Ryan was unwilling to negotiate, stating his only objective was to permanently kill the acquisition. As that outcome becomes increasingly unlikely, the PS5 manufacturer will seemingly have no alternative but to hammer out the details of Microsoft’s 10-year Call of Duty proposal.

Read More: Xbox Cans PS5 Version Of Big Game Despite All The Talk About Player Choice

Determining the availability of Activision Blizzard games like Diablo IV and an upcoming Black Ops sequel on Game Pass competitor PS Plus will be a key part of that. In its latest argument to the CMA pushing back on Sony’s concerns, Microsoft went so far as to suggest that 10 years would be plenty of time for it to go make its own Call of Duty competitor if it was so concerned about losing it.

In the meantime, Microsoft still needs to get approval from European regulators and deal with an antitrust lawsuit by the Federal Trade Commission. But investors seem more hyped for the deal than they’ve ever been. Activision Blizzard’s stock price shot up to $US85 ($118) a share following the CMA’s latest announcement, more than at any point since the acquisition was announced.

It’s the most the company has been worth since it was sued for alleged widespread sexual harassment and discrimaiton.



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