The UK’s competition regulator eased the deal between Microsoft and Activision slightly, sending the game publisher’s stock soaring.
Shares of Activision Blizzard Inc (NASDAQ: ATVI) soared Friday with positive news UK Competition and Markets Authority’s stance on Microsoft’s (NASDAQ: MSFT) deal. Britain’s competition regulator has reportedly eased its impending Microsoft takeover, in a statement the CMA no longer sees the computer software giant’s acquisition of Activision as a threat to gaming competition. said no.
Martin Coleman, who presided over the CMA’s investigation, said on Friday:
“After reviewing the additional evidence provided, we believe that the costs to Microsoft of withholding Call of Duty from PlayStation will outweigh the benefits of taking such action, so the merger would significantly increase competition for console gaming services. We have tentatively concluded that it will not decrease.”
However, Coleman also noted that the regulator is still investigating other related gaming issues.
“Our tentative view that this transaction raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation is on track for completion by the end of April. ,” said the Chair of the Independent Panel of Experts.
Activision is up 5% as Microsoft nears completion of acquisition
Activision shares rose more than 5% during the US trading session after the CMA announced Microsoft’s ruling. Conversely, software giant shares fell slightly amid the broader market downturn.
Nonetheless, the CMA’s approval of the Activision acquisition is a win for Microsoft as it seeks to expand its video game brand. In a statement, a Microsoft spokesperson said:
“We appreciate the CMA’s rigorous and thorough evaluation of the evidence and welcome its latest preliminary findings.”
The technology company’s new take on gaming is also reflected in its acquisition of ZeniMax Media, the parent company of Bethesda Softworks.
The CMA has previously feared the worst about Microsoft’s acquisition of Activision, citing higher prices and fewer options. Most notably, UK competition regulators were also concerned that the deal could hinder competition in the console games market. It was withdrawn after receiving considerable feedback from others.
Other developments from deals
Microsoft recently gained additional support from other companies that were previously ambivalent or outright opposed to a deal with Activision. The tech giant won support by ensuring competitors would share Activision’s most coveted IP with these other platforms. For example, Microsoft revealed last month that he signed a 10-year binding legal agreement with Nintendo to share “Call of Duty.”
Microsoft has previously taken a similar stance against its biggest gaming rival, Sony, which makes the wildly popular PlayStation console. However, Sony has yet to play ball with the computer software giant when it comes to joint offers.
The company founded by Bill Gates has offered an olive branch to chip giant Nvidia (NASDAQ: NVDA), which had previously opposed its acquisition of Activision. Microsoft said it has struck a deal with the Santa Clara-based company to bring his Xbox games to his Nvidia cloud gaming service. Additionally, Microsoft plans to bring Activision’s game library to Nvidia’s gaming-centric platform upon completion of the acquisition.
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