Activision Blizzard (NASDAQ:ATVI) recently entered a settlement with the U.S. Department of Justice. The regulator had accused the video game company of limiting competition for players in two of its esports leagues for the games “Overwatch” and “Call of Duty.” Also, the company has been accused of capping salaries for those players.
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The company allegedly collaborated with independently owned esports teams and implemented a Competitive Balance Tax. The tax aimed to penalize teams whose players’ salaries exceeded an Activision-imposed cap.
As part of the settlement terms, subject to a federal judge’s approval, Activision has consented to not impose any salary caps on esports players or teams.
Is Activision a Good Stock to Buy?
Although Activision was able to resolve this most recent legal dispute, it still faces legal obstacles with its proposed merger with Microsoft (MSFT). The Japan Fair Trade Commission recently gave the businesses the go-ahead. However, the U.S. Federal Trade Commission has yet to approve the agreement.
Currently, ATVI stock has a Strong Buy analyst consensus rating based on 13 unanimous Buy recommendations. Further, the stock’s average price target of $92.33 per share implies an upside potential of 8.2%.
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