Published on 16 Oct 2023 on Zacks via Yahoo Finance

Microsoft (MSFT)-Activision Deal Gets UK Regulators' Nod

Microsoft MSFT recently gained approval for the $69 billion acquisition of Activision Blizzard ATVI by the U.K. competition watchdog, Competition and Markets Authority (“CMA”).This decision comes after Microsoft restructured the deal, wherein the company will not acquire the cloud gaming rights held by Activision.Instead, the cloud gaming rights will be sold to an independent third party, Ubisoft Entertainment SA UBSFY, before the deal is completed. This move establishes Ubisoft as a key supplier of content to cloud gaming services, which is similar to the role ATVI would have played.The condition set by the CMA is that the sale of Activision's cloud streaming rights must be completed before the merger.The CMA views Microsoft's concession to transfer cloud streaming rights as a game-changing move that will promote competition in the growing cloud gaming market. This move is designed to prevent MSFT from having a stranglehold over this market and aims to ensure more competitive prices, better services and more choices for consumers.Shares of this Zacks Rank #3 (Hold) company have gained 36.7% year to date compared with the Zacks Computer and Technology sector’s return of 36.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Activision has narrowed its focus onto its biggest franchises — Call of Duty, Warcraft, Diablo and Overwatch. It also owns classic series like Starcraft, Crash Bandicoot, Spyro, Tony Hawk and Guitar Hero, which may see new life under MSFT’s ownership.However, despite the merger, popular titles, such as Call of Duty: Modern Warfare 3 and Diablo 4, might not be made immediately available on Xbox Game Pass this year. Activision Blizzard plans to start bringing its games to the subscription service in 2024.

Microsoft Corporation Price and Consensus