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Activision Blizzard stock price nears pre-Microsoft bid level as ATVI insiders fret over MSFT walking away – Capital.com

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By Jenal Mehta
14:01, 7 November 2022
The biggest deal in gaming history continues to face scrutiny from regulators.
In the meantime, the door remains open for both Activision Blizzard (ATVI) and Microsoft (MSFT) to walk out on the deal, and it turns out one of them might just will.
Microsoft’s (MSFT) $69 bn all-cash deal to buy out Activation Blizzard (ATVI) has been undergoing its regulatory approval process in the United States, United Kingdom and European Union.
The deal will likely make Microsoft the third largest gaming company after Sony (SNE) and Tencent (0700). Acquiring Activision Blizzard will give Microsoft control of Call of Duty, which is the topic of concern for antitrust regulators. The game is currently available on Sony’s PlayStation.
There are concerns that following acquisition Microsoft has little incentive to allow it to be available on its rivals device, and has the power to have it be available on its own Xbox device.
UK Competition and Markets Authority (CMA) said its most recent statement about the deal
“Following the Merger, it may be significantly more difficult for rivals to compete against Microsoft on any parameter of competition, as Microsoft would have by far the strongest integrated offering across cloud, computer OSs, and gaming content”
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CMA have moved onto its second phase of its investigation and despite Microsoft stating previously it is confident that the deal will receive regulatory approval, the New York Post has not reported that teams in Activision Blizzard are not so confident in the future of the deal.
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The sources say that Microsoft was not expecting such a level of investigation from regulators and are only putting on a front about their confidence in the deal.
Activision Blizzard share price soared to $100 following the announcement of the deal, the price has slowly lowered $70. Showcasing the dwindling investor confidence as more news emerges about regulatory concerns.
In a recent Tech Live event by Bloomberg, Microsoft’s (MSFT) Gaming CEO Phill Spencer said that the aim of the acquisition is to enhance the Mobile gaming and Cloud divisions at Microsoft.
He countered the concern about Call of Duty not being available on PlayStation, he said in fact he would like it to be available on more devices. “ I would love to see the game being played on a number of different streams”. He recalled how after Microsoft took over Minecraft, they increased the number of locations it was available from 12 to 22.
However when pressed on it, Spencer said the game will be made available on PlayStation “as long as it made sense”
Any market watcher can realise that the benefit of this acquisition for Microsoft only extends as deep as its ability to keep Activision Blizzard games exclusively under its devices or streaming services. If regulators end up considering this to be a hindrance to healthy competition, there is a chance Microsoft may look elsewhere to invest its $69 bn cash.
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