Microsoft (NASDAQ:MSFT) has entered into a 10-year agreement with Boosteroid, a cloud gaming company, as per a Wall Street Journal report. The agreement relates to the distribution of “Call of Duty,” a well-known game from Activision Blizzard (ATVI), as well as Xbox PC games from Microsoft. Importantly, the deal will only hold if Microsoft’s planned $68.7 billion acquisition of Activision is approved.
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The acquisition has long been under scrutiny by regulatory authorities in the EU, the U.S., and the U.K. The primary goal of this transaction is to overcome one of the biggest obstacles impeding the acquisition, namely regulators’ worries about consumers’ access to “Call of Duty.”
The latest distribution agreement is Microsoft’s third attempt to make regulators believe that the Activision deal would increase the game’s accessibility to more players. Last month, Microsoft made similar deals with Nintendo (NTDOY) and Nvidia (NVDA) to allow access to new “Call of Duty” games.
Is MSFT a Buy or Sell?
Turning to Wall Street, MSFT stock comes in as a Strong Buy. Out of 30 analyst ratings, there are 25 Buys, four Holds, and one Sell recommendation. The average price target is $292.07, implying upside potential of 12%.