'Greater Competition In Traditional Gaming': Microsoft Says Sony And Nintendo Will Benefit From Activision Acquisition

Zinger Key Points
  • An acquisition of Activision Blizzard by Microsoft Corporation is facing regulatory hurdles.
  • Microsoft launched a new website highlighting the acquisition, which could ease concerns.

A planned acquisition of a leading video game publisher and console maker has faced regulatory hurdles. The acquirer was taking steps to help make the deal move forward, including creating a new landing page.

What Happened: As it faced regulatory hurdles, Microsoft Corporation MSFT launched a new page to share information on its planned acquisition of Activision Blizzard, Inc. ATVI.

Microsoft outlined its vision for gaming being “more choice and more games for people everywhere.”

The new website, which was highlighted by IGN, painted the acquisition of Activision Blizzard as part of Microsoft’s strategy of helping gamers.

“We want to enable people to play games anywhere, anytime and on any device. And developers deserve more options to build, distribute and monetize their groundbreaking games. When we do this, we all win,” Microsoft said.

The company said it created the website to share more on the gaming industry and how the planned $68.7 billion ($95 per share) acquisition fit into Microsoft’s gaming strategy.

Microsoft highlighted the acquisition as being positive for gamers, game creators and the overall game industry.

The company argued the acquisition will provide more games on more devices including the Xbox, Playstation from Sony Group Corp SONY and mobile phones.

The company said the acquisition can provide more revenue streams and fair marketplace for game creators along with more ways to get games to more players.

For the gaming industry, Microsoft said that more competition in the mobile space will be good as the sector was dominated by a few big players.

Microsoft also saw the deal as having “greater competition in traditional gaming, where Sony and Nintendo will remain the biggest.”

Related Link: Exclusive: Aribtrage Expert Julian Klymochko Explains Why Warren Buffett Is Buying Activision Blizzard Shares 

Why It’s Important: Microsoft’s acquisition of Activision Blizzard has already and will likely face more hurdles to get approved due to regulatory concerns.

The company’s acquisition could lower competition in the space and also help the company that owns the Xbox console make games exclusive and take them away from rivals.

Comments on the website noted Sony Group Corp SONY and Nintendo Co NTDOY could gain from the overall growth of more games in the space. Dealreporter recently shared Sony met with European regulators over the acquisition. 

Gamers were initially concerned by the acquisition, that it would make franchises such as “Call of Duty,” which is owned by Activision Blizzard, exclusive to the Xbox console moving forward. The comments listed on the website painted a picture that the acquisition will lead to more games on more devices. This could be posted to help show that the company will not make games exclusive for Xbox.

“Giving players choice in how they play their games makes gaming more accessible and leads to larger, more vibrant communities of players. Choice is equally important to developers," said Microsoft Gaming CEO Phil Spencer said on the site, adding, "Developers benefit from having a diversity of distribution and business models for their games. Choice unlocks opportunities for innovation and enables the industry to grow.”

Microsoft President Brad Smith said the acquisition could help eliminate the friction between gamers and game creators.

Microsoft also included a section that the deal will provide an “emphasis on positive workplace culture.” This comes as Activision Blizzard has faced concerns over the workplace environment. The comment by Microsoft could be a way to show that the acquisition could help change the company moving forward.

ATVI Price Action: Activision Blizzard shares were up 0.86% to $75 on Tuesday at market close versus a 52-week range of $56.40 to $86.90.
Photo: Gorodenkoff via Shutterstock



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