Is Activision Owned By Microsoft? If It Passes Regulatory Hurdles, It Will Be
Key takeaways
- Activision is set to be bought by Microsoft for $75 billion
- The FTC and CMA have both relented on their stances, potentially clearing the path for the deal to go ahead
- It was meant to pass in July, but the delays have given a new date of October 18
Big Tech giant Microsoft has faced an uphill battle to get its hands on gaming company Activision, which is home to some of the world’s most popular game franchises, including Call of Duty, Crash Bandicoot and Skylanders.
But with the news that the British regulator is finally relenting on its stance, it looks like the deal might just make it to the finish line after all. Here’s the lowdown on everything you need to know about the Microsoft and Activision merger, including that all-important deadline.
What’s happening with the Activision deal?
Microsoft first announced its intention to buy up gaming titan Activision last year, in a deal worth around $75 billion. The merger immediately set red alerts going at regulators, including the U.K.’s Competition and Markets Authority (CMA) and the Federal Trade Commission (FTC) in the U.S.
Over the summer, the CMA blocked the deal from going ahead to “protect innovation and choice in cloud gaming.” The EU Commission waved the deal through a few weeks later, leaving the U.K. with egg on its face.
But now the UK regulatory has said Microsoft’s restructured deal, which includes selling the non-European streaming rights for Activision games to Ubisoft, has allayed their concerns. “The new deal instead results in the cloud streaming rights for Activision’s games being transferred to an independent player, Ubisoft, maintaining open competition as the market for cloud gaming develops over the coming years,” said the CMA.
As for the FTC, which had applied for an injunction against the merger, but a judge ruled in favor of Microsoft, it has now suspended its administrative challenge to block the Big Tech titan from buying Activision and dropped its appeal process. That doesn’t mean it can’t fire up another case against the deal later, even after it’s closed.
Will it go ahead or not?
At the CMA news, Microsoft stock rose 0.3% in Friday pre-trading, while Activision shares climbed 1.8% higher. Ubisoft, whose stock price is now partially tied to the deal going ahead, saw a 4% gain.
Microsoft has made a fair few concessions at this point to get the deal over the line. That includes a 10-year deal with Sony to keep the Call of Duty franchise on PlayStation consoles and the EU requiring Microsoft to license Activision games to competing cloud gaming platforms.
If the CMA can be persuaded in time, the deal will now go through by October 18. That’s just a few weeks for the future fate of Microsoft and Activision to be decided.
The bottom line
Microsoft and Activision have had a tough ride from the regulators — understandable, given Big Tech’s dominance in the business world, but every regulatory body has arrived at the same conclusion anyway. It’s left Activision’s share price at the mercy of the deal, so investors will be keen to see its stock potential realized in the long term.
