Xbox / Activision: Acquisition by Microsoft could fail according to several sources | Xbox One

The case for Microsoft’s acquisition of Activision Blizzard is currently still in the hands of competition regulators in several countries. While the European Commission will announce today an in-depth investigation, we still have to be patient before we see the first tangible results of these investigations. But sources close to Activision are teasing a new, somewhat pessimistic scenario.

Investors and analysts are increasingly skeptical of Microsoft’s acquisition

Activision insiders and analysts spoke to reporters at the New York Post about the progress of Microsoft’s $69 billion acquisition of Activision Blizzard. According to them, the fact that in-depth investigations are multiplying and that recent developments are not going in Microsoft’s direction will serve as an important wave of skepticism on the part of investors.

Analysts say Microsoft wanted to take advantage of its good relationship with regulators to easily push the Activision Blizzard acquisition without considering many in-depth investigations. Pressure is mounting on Microsoft between strong opposition from Sony and skepticism from regulators.

Despite the fact that Microsoft has claimed to want to keep the Call of Duty license on all platforms on several occasions, the regulatory authorities remain suspicious of this and it must be said that Redmond’s behavior does not help the situation. Ahead of today’s in-depth EU investigation, Microsoft refused to provide legal remedies to EU regulators, Reuters reported. The group had the option of introducing so-called behavioral therapies in the EU, such as the official promise to keep the Call of Duty license on PlayStation. Microsoft did not want to do this, and despite the fact that the American company always had the possibility to do it later, this behavior remains suspicious of investigators.

Activision insiders ask Microsoft to turn around

In the face of this, Activision analysts are publicly asking Microsoft to adopt a more favorable position with regulators. In addition, group shareholders will be paid whether or not Microsoft makes any concessions. Here’s what a hedge fund analyst who’s been following the case closely says:

“If you were Activision, you would want Microsoft to give everything for free forever. But that obviously would destroy the convention economy.”

Dan Ives, Managing Director of Wedbush Securities, added

“Microsoft’s decision to buy Activision is about exclusivity. If giving up exclusivity is one of the compromises needed, Microsoft will have to think long and hard to see if it’s still the right deal. Microsoft isn’t buying that asset so other companies can use Activision games as much.” It all comes down to what concessions are.”

For Clay Griffin, Research Analyst at MoffettNathanson, the result is similar:

Microsoft cannot be forced to accept strict terms.

What stands out from these testimonials is that the possibility of making Activision games Xbox exclusive one day or another remains a major attraction in this Microsoft acquisition, despite Phil Spencer’s statements. If Microsoft signs a legal agreement ensuring that Activision games are not exclusive to Xbox consoles, the acquisition could lose Microsoft’s interest and could constitute a violation of the agreement, according to these same sources.

Now, Microsoft is legally obligated to do everything possible to complete the acquisition. If not, Activision could sue the Xbox maker if it believes the Satya Nadella-led company intentionally thwarted the acquisition. Spokespersons for both companies pass on the responsibility and remain very confident. This is what was said on the Activision side:

“We greatly value our close working relationship with Microsoft. We are confident in the agreement and its development, and know that Microsoft is working hard to make it happen. Any suggestion to the contrary is void.”

A Microsoft spokesperson told the New York Post:

“From the moment this acquisition was announced, we have acted urgently to show that we mean business and take the necessary steps to gain approval – including making proactive commitments on how we run our business with players and developers at the hub. The process has progressed as planned and we continue to expect Concluding the agreement on time.”

Testimonials that are not very attractive relative to the rest of the issue, but nonetheless are relevant and important to get a more global reading of this acquisition that has caused and will continue to pour a lot of ink in the coming months. Activision and Microsoft recently confirmed their confidence in the feasibility of the deal, expected by June 2023.