{"id":181707,"date":"2023-09-22T13:39:14","date_gmt":"2023-09-22T13:39:14","guid":{"rendered":"https:\/\/precoinnews.com\/?p=181707"},"modified":"2023-09-22T13:39:14","modified_gmt":"2023-09-22T13:39:14","slug":"75-billion-microsoft-activision-deal-just-a-shout-away-from-closure","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/75-billion-microsoft-activision-deal-just-a-shout-away-from-closure\/","title":{"rendered":"$75 Billion Microsoft, Activision Deal Just a Shout Away From Closure"},"content":{"rendered":"

When Microsoft Corp. (NASDAQ: MSFT) first offered to pay $75 billion to acquire Activision Blizzard Inc. (NASDAQ: ATVI), the hottest topic in tech was the metaverse. When was the last time you heard that word? Does anyone still think about that?<\/p>\n

The U.K.\u2019s Competition and Markets Authority (CMA) does. On Friday morning, the CMA gave a tentative go-ahead to the deal after Microsoft agreed to divest Activision\u2019s cloud-gaming rights to French firm Ubisoft.<\/p>\n

What the CMA has agreed to is a pre-merger sale of Activision\u2019s cloud gaming rights to Ubisoft without the rights ever passing through Microsoft\u2019s hands. According to the CMA, \u201cThe prior sale of the cloud gaming rights will establish Ubisoft as a key supplier of content to cloud gaming services, replicating the role that Activision would have played in the market as an independent player.\u201d<\/p>\n

The deal includes cloud gaming rights to such Activision blockbusters as Call of Duty, World of Warcraft, and Diablo. Without those rights, Microsoft has no role in deciding which competitors will have access to Activision games in the European Economic Area (EEA):<\/p>\n

\n

Unlike the remedies the CMA previously rejected, Ubisoft will be free to offer Activision\u2019s games both directly to consumers and to all cloud gaming service providers however it chooses, including for buy-to-play or multigame subscription services, or any new model for providing content that might emerge as the market develops. The deal with Ubisoft also requires Microsoft to port Activision games to operating systems other than Windows and support game emulators when requested, addressing the other main shortcoming with the previous remedies package.<\/p>\n<\/blockquote>\n

The CMA\u2019s decision clears up most, but not all, of the agency\u2019s concerns with the deal. CMA has \u201climited residual concerns\u201d related to how the sale of Activision\u2019s streaming rights to Ubisoft \u201ccould be circumvented, terminated, or not enforced.\u201d The agency has asked Microsoft to respond to those concerns by October 6.<\/p>\n

Sarah Cardell, the head of the CMA, commented:<\/p>\n

\n

It would have been far better, though, if Microsoft had put forward this restructure during our original investigation. This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.<\/p>\n<\/blockquote>\n

What Microsoft gains if the deal closes is a lot less than what it had bargained for when the deal was first announced in January 2022. While all the talk then was about the metaverse, now the Activision acquisition is likely to be positioned as the savior of Microsoft\u2019s slow-growing mobile gaming business.<\/p>\n

For fiscal 2023 that ended in June, Microsoft reported revenue of $54.7 billion in its More PC segment (including the gaming business), a dip of 9% year over year. Gaming revenue dropped 5% year over year, led by an 11% drop in Xbox hardware sales and a 3% decline in content and services revenue. Operating income in the segment fell 20%. The business does need to be resuscitated.<\/p>\n

Over the past four quarters, Activision has reported revenue of $9.2 billion, a third of which came in the December quarter. Operating income over the past four quarters totaled $2.2 billion. That will help close some of the holes in Microsoft\u2019s gaming business, but it will not be the blockbuster metaverse the company hoped for nearly 2 years ago.<\/p>\n

Activision stock traded up about 2% in Friday\u2019s premarket at $94.05, while Microsoft traded up about 0.3%. The Nasdaq Composite was trading up about 0.4%.<\/p>\n

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Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When Microsoft Corp. (NASDAQ: MSFT) first offered<\/p>\n","protected":false},"author":3,"featured_media":181706,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"\n$75 Billion Microsoft, Activision Deal Just a Shout Away From Closure - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/markets\/75-billion-microsoft-activision-deal-just-a-shout-away-from-closure\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"$75 Billion Microsoft, Activision Deal Just a Shout Away From Closure - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"When Microsoft Corp. 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