13 October 2023
If you are covering the CMA giving its approval to the Microsoft-Activision deal, please find below a comment from Ben Barringer, equity research analyst at Quilter Cheviot:
“After many months of regulatory rumbling, the Activision-Microsoft saga can finally be put bed and the gaming world can move on. For Microsoft, this deal has ended up without the cloud gaming rights to Activision titles. This is ultimately a fairly big deal given the roster of games Activision has, such as Call of Duty, Overwatch and Candy Crush – big franchises with strong consumer loyalty.
“Ultimately, Microsoft will see this now as the opportunity to move forward with its cloud gaming strategy, and with or without Activision titles, it will still look to dominate the space and leverage the Xbox brand. It will need to be a little nimbler in how it does it in order to maximise revenues, but given the expertise in Microsoft there is a good chance they make it a success even without Call of Duty. It is a situation they will just need to live with for now.
“For the CMA, this will be seen as a victory, but they will need to be careful not to over-regulate the tech sector. There are fears the UK is a bad place to do business and the tech industry in particular will be watching its moves closely. With Meta abandoning a prime office location recently and Adobe’s deal also being probed by the CMA, the government will hope it relents a bit in its desire for ultimate consumer protection. It is a fine balancing act that will be difficult to achieve.”
