Pachter Expects Microsoft's Activision Deal to Close Soon, UK Has a 'Losing Legal Argument' - News
by William D'Angelo , posted on 08 February 2023 / 8,210 Views
The UK's Competition and Market Authority (CMA) earlier today released its provisional conclusion on Microsoft's Activision Blizzard acquisition.
It concluded the deal could put Microsoft in an even stronger position in cloud gaming and could stifle competition in the growing market, which in turn could harm UK gamers who are unable to afford consoles. It could also weaken the rivalry between Xbox and PlayStation in the video game console market and the CMA says this could also harm UK gamers.
Wedbush analysts Michael Pachter and Nick McKay in a statement said that despite the objections from the CMA, they expect the deal will still close.
"We read today's release as a signal that the UK knows it has a losing legal argument," they analysts said via GamesIndustry. "In our view, the FTC figured this out late last year, and rushed to file suit to block the merger in the hopes of being first to extract concessions from Microsoft.
"We believe that the CMA reached the same conclusion during its review, and accelerated its formal objection to the deal and proposed remedies in order to step in front of the FTC and gain bragging rights.
"The FTC has as yet to offer proposed remedies, and the CMA, by listing onerous structural remedies, has positioned itself to be the 'dragon slayer' in this action."
The analysts said that instead of splitting up Activision Blizzard, Microsoft will agree to multiple behavioral remedies. This might include keeping Call of Duty on non-Microsoft platforms for a number of years, which Microsoft has already pledged to do.
Pachter and McKay don't believe Microsoft would agree to making Activision Blizzard games like Call of Duty on competing cloud gaming services.
"We expect Microsoft's acquisition of Activision to close no later than mid-May," the analysts concluded.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.