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Microsoft’s Activision Blizzard Takeover Faces In-Depth Probe

  • The Competition and Markets Authority has given Microsoft a deadline of Sept. 8 to address its concerns.
  • The pending deal would make Microsoft the world’s third-largest gaming company by revenue.
Activision Blizzard makes games like Call of Duty and was acquired by Microsoft.
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Microsoft’s deal to acquire Activision Blizzard for $68.7 billion is facing a potential in-depth review by the Competition and Markets Authority, a U.K. antitrust watchdog. 

The deal — first announced in January — could receive approval by the CMA if Microsoft offers remedies to concerns over decreased competition in gaming consoles. 

  • There are also concerns over multi-game subscription services and cloud gaming markets.
  • The CMA has given Microsoft a deadline of Sept. 8 to address its concerns.
  • The pending all-cash deal would make Microsoft the world’s third-largest gaming company by revenue.

In July, Microsoft submitted “Second Request” documents to the FTC regarding its deal for Activision Blizzard. The government agency can ask the parties to alter the deal, opt not to object, or issue a court order seeking to block it.

Lackluster Earnings 

Both Microsoft and Activision Blizzard took a hit in their last earnings reports following a surge of interest and spending at the height of the pandemic. The gaming market has dealt with constraints, including the ongoing semiconductor shortage and supply chain disruptions. 

Activision Blizzard reported $1.64 billion in second-quarter revenue — surpassing Wall Street estimates of $1.59 billion but down from $2.3 billion for the same period last year.

Microsoft generated $51.9 billion in revenue in fiscal Q4, its slowest revenue growth since 2020. Its gaming revenue fell by $259 million during the quarter, while its Xbox content and services segment reported a 6% decrease in revenue compared to Q4 2021.

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