Activision Blizzard, Inc’s (NASDAQ: ATVI) $69 Billion Acquisition under Pressure by Britain Antitrust Regulator

Activision Blizzard, Inc (NASDAQ: ATVI) move down around 1% in early trading session as under antitrust regulator of Britain recently declared that Microsoft Corp’s (MSFT) $69 billion acquisition of “Call of Duty” maker Activision Blizzard could damage rivalry in gaming consoles, subscription services and cloud gaming, and it wants to be investigated in depth.

The Competition and Markets Authority (CMA) warned on Thursday that if Microsoft refuses to offer competitors access to Activision’s best-selling games, the transaction, the largest in gaming history, might harm the sector.

“We are worried that Microsoft may use its post-merger influence over popular games like as ‘Call of Duty’ and ‘World of Warcraft’ to hurt rivals, including recent and prospective rivals in multi-game subscription services and cloud gaming,” the CMA stated.

According to the CMA, Microsoft, with Xbox, and its rivals Sony and Nintendo, have commanded the console industry for 20 years, with few new entrants. Microsoft President and Vice Chair Brad Smith stated, “We want consumers to have greater access to games, not fewer.”

“Sony, as the industry leader, claims it is concerned about ‘Call of Duty,’ but we have stated that we are dedicated to having the same game accessible on both Xbox and PlayStation on the same day,” he added.

Several experts characterized the decision as expected, claiming that the agreement would not be anti-competitive if competitors were granted access to Microsoft games, as Microsoft has promised.

Microsoft should provide more assurances and put information about exclusivity in writing, according to Atlantic Equities analyst Kunaal Malde.

Activision still expects the transaction to finalize in Microsoft’s fiscal year ending in June 2023. Companies have until September 8 to submit suggestions in response to the CMA’s concerns.

As Activision Blizzard, Inc approaches its next earnings release date, Wall Street will be searching for signs of optimism. Activision Blizzard, Inc is expected to announce earnings of $0.53 per share on that day, representing a 26.39% decrease year over year. Meanwhile, the Zacks Consensus Estimate for revenue is $1.71 billion, an 8.98% decrease from the previous year.

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