Microsoft faces EU antitrust warning over Activision deal
Yahoo Finance's Dan Howley breaks down the latest pushback Microsoft is receiving from regulators and Big Tech competitors over its planned acquisition of Activision Blizzard.
Video Transcript
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BRIAN SOZZI: Meta just canned 10,000-plus people, yet they have a big presence here at Davos. Julie, maybe I shouldn't be so surprised.
JULIE HYMAN: Yeah, maybe not. That was one of the questions we had coming in to this-- about whether tech companies would still have big presences in storefronts here on the promenade. And the answer is they do.
RACHELLE AKUFO: Well, speaking of big tech, it's been almost a year to the day since Microsoft announced the deal to acquire Activision Blizzard. The buyout would make it the world's third biggest gaming company by revenue behind Tencent and Sony. But since then, the tech giant has faced a series of challenges to the proposed deal-- not least of which from the FTC. But is there more opposition ahead? Yahoo Finance's Dan Howley has the details. Hey, Dan.
DAN HOWLEY: Hi, Rachelle. That's right. The EU is preparing what's called a "statement of objection." This is according to "Reuters." And essentially, what that means is they're going to be providing Microsoft with information on what they don't agree with, as far as the potential $69 billion Activision Blizzard acquisition. Now, that deal would give Microsoft the ability to produce and publish "Call of Duty" games, as well as games like "World of Warcraft," "Diablo."
Sony-- huge objections to this, as well as Google. The reason being is because Sony, in its own right, relies on sales of "Call of Duty." They don't want "Call of Duty" taken off of the PlayStation platform. Now, from a business standpoint, it wouldn't make sense for Microsoft to do that at all. They would be cutting off their nose to spite their face, just because of the sheer number of gamers there.
"Call of Duty" made in a billion dollars in its first 10 days on the market recently. So it doesn't appear that they would end up taking it off the PlayStation platform. What Sony seems to really be concerned about is Microsoft's ability to put this in the cloud, and put it on its own cloud gaming platform, which is under its GamePass subscription service. Sony has its cloud gaming platform of its own. Microsoft's though, is just beating it out as far as overall offerings, and frankly, performance. So Sony's objecting to it from that perspective.
You can get the same sense from Google, as well. While they're sunsetting their Stadia service, they still have the back-end technical capabilities to run a cloud gaming platform. And they're going to be offering that to third-party partners. So that means that another gaming company could come in and start using Google's Stadia technology. So you can understand why they would be objecting to this kind of deal, because it would give Microsoft a significant leg up in the cloud gaming space-- which is still nascent, but expected to be rather large in the coming years. So now we have the EU, we have the UK, as well as the US all seeming to lodge objections to this acquisition.
RACHELLE AKUFO: I mean, it's understandable, given where the future of gaming is headed. Everyone wants to make sure they have a stake in it. A big thank you there, Dan Howley.
