The UK competition regulator is easing a bit of the Microsoft-Activision deal, sending shares of the game publisher higher.
Shares of Activision Blizzard Inc (NASDAQ:ATVI) rose on Friday On positive news On the UK Competition and Markets Authority’s position on the Microsoft (NASDAQ:MSFT) deal. According to reports, the British competition regulator has softened the impending acquisition of Microsoft. In a statement, the Capital Markets Authority said it no longer views the computer software giant’s acquisition of Activision as a threat to gaming competition.
On Friday, Martin Coleman, who oversaw the CMA’s investigation, said:
“After considering the additional evidence presented, we have now tentatively concluded that a merger would not significantly reduce competition in console game services because the cost to Microsoft of blocking Call of Duty from PlayStation would outweigh any gains from taking such action.”
However, Coleman also noted that the regulator is still looking into other gaming matters.
“Our provisional view that this transaction raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation remains on track to conclude by the end of April,” said the chair of the independent expert panel.
Activision shares 5% as Microsoft seeks to close the acquisition
Shares of Activision rose more than 5% during the US trading session after the Capital Markets Authority announced its ruling on Microsoft. On the contrary, the software giant’s stock fell slightly amid a broader market downturn.
Still, the CMA’s seal of approval to acquire Activision is a win for Microsoft as it seeks to expand its video game brand. A Microsoft spokesperson said in a statement:
“We appreciate the CMA’s careful and comprehensive assessment of the evidence and welcome its updated provisional results.”
The technology company’s renewed commitment to gaming is also reflected in the acquisition of Bethesda Softworks’ parent company ZeniMax Media.
The CMA previously feared the worst with Microsoft’s acquisition of Activision, citing high prices and fewer options. In particular, the British competition regulator was also concerned that the deal could hinder competition in the console gaming market. However, the regulator backtracked after receiving substantial comments from various stakeholders regarding the deal.
Other developments from the deal
Microsoft has also recently gained additional support from other companies that were previously ambivalent to the Activision deal or outright opposed to it. The tech giant won support by assuring competitors that it would share Activision’s IP with these other platforms. For example, Microsoft revealed last month that it had signed a binding, decade-long legal agreement with Nintendo to share “Call of Duty.”
Microsoft also previously expressed a similar attitude towards its largest gaming competitor Sony, which produces the famous PlayStation console. However, Sony hasn’t played ball with the computer software giant regarding its collaborative offering.
The company founded by Bill Gates has offered an olive branch to chip giant Nvidia (NASDAQ:NVDA), which previously opposed the Activision acquisition. Microsoft said it signed a deal with the Santa Clara-based company to bring its Xbox games into Nvidia’s cloud gaming service. In addition, Microsoft plans to bring Activision’s game library to Nvidia’s game-focused platform when the acquisition closes.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When not in the depths of cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.