Microsoft’s Activision Blizzard Acquisition Deal Is Still Not Over, As per Analysts

Microsoft’s attempt to acquire Activision Blizzard was hit by a major roadblock yesterday. It’s been over a year since the company has been trying to get this deal green-lit by the UK’s Competition and Markets Authority (CMA).

It was judgement day yesterday and the UK antitrust regulator gave its verdict against Microsoft’s acquisition deal, saying that the acquisition could hinder competition in cloud gaming.

UK’s CMA doesn’t get the final word on the deal, but its ruling does play a significant role in the future of this proposed $69 billion acquisition.

Experts’ opinion

Some believe the regulator’s judgement effectively rules out Microsoft’s chances to get the deal approved by US antitrust regulators and other such bodies.

Speaking to Bloomberg, senior antitrust litigation analyst Jennifer Rie said that overturning their decision could take “years” even if Microsoft manages to pull that off.

Rie feels that the deal won’t survive that long, and the ruling has already taken 15 months before the original verdict from UK regulators.

Ampere analyst Piers Harding-Rolls tweeted about the duration as well. He believes Microsoft won’t be able to get the CMA appeal closed within the year. Harding-Rolls told the BBC that Microsoft still has “a chance” to win the appeal, but CMA has a track record of winning such appeals.

Microsoft has said it will appeal the CMA decision

The Competition Appeal Tribunal site says straightforward cases are aimed to be dealt with within 9 months – if MS wins it gets returned to the CMA

Chances of this closing this year are now slim. That means we get the FTC case

— Piers Harding-Rolls (@PiersHR) April 26, 2023

There are some analysts who believe this is not the end of the Microsoft-Activision Blizzard deal saga. Wedbush Securities analyst Michael Pachter told GameSpot that Microsoft can win this appeal through two remedies.

One of those would be to “carve out Game Pass in the UK and keep all Activision Blizzard content off of the service.” Another remedy could be to “commit that they will keep the price of Game Pass at the current price plus no more than the rate of inflation (2-3% per year) for the next ten years.”

Pachter feels that Microsoft can still manage to get this deal done in the summer.

Meanwhile, Activision released a strong statement saying the CMA did “a disservice to UK citizens, who face increasingly dire economic prospects” and even added that “the UK is clearly closed for business.” Activision says it will “work aggressively with Microsoft” for the appeal.

Nintendo isn’t ‘technically capable’ of running Call of Duty

As mentioned above, the CMA cited cloud gaming competition as one of the reasons behind blocking the deal.

Interestingly, the CMA also highlighted Microsoft and Nintendo’s deal, which brings Call of Duty to the Nintendo Switch.

The CMA argued that while the Xbox and PlayStation “compete closely with each other in terms of content, target audience, and console technology,” the same cannot be said for Nintendo.

They added, “We found that Nintendo’s consoles compete less closely with either of Xbox or PlayStation, generally offering consoles with different technical specifications, and with its most popular titles tending to be more family- and child-friendly.”

The UK regulator said that they have “seen no evidence” which suggests the Nintendo Switch can run Call of Duty at an optimum level.