"Game On" is The Fly’s weekly recap of the stories powering up or beating down video game stocks.
EU CLEARS MICROSOFT-ACTIVISION DEAL: Early last week, the European Commission approved the proposed acquisition of Activision Blizzard (ATVI) by Microsoft (MSFT). The approval is conditional on full compliance with the commitments offered by Microsoft. "The commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation," the agency said in a statement. The Commission said its market investigation indicated that Microsoft would not be able to harm rival consoles and rival multi-game subscription services. "At the same time, it confirmed that Microsoft could harm competition in the distribution of games via cloud game streaming services and that its position in the market for PC operating systems would be strengthened," it added. To address the competition concerns identified by the Commission in the market for the distribution of PC and console games via cloud game streaming services, Microsoft offered "comprehensive" licensing commitments, with a 10-year duration, according to the European Commission.
Meanwhile, the U.K.’s Competition and Markets Authority responded to the European Commission approval of the deal, saying, "The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming. The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector. Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years. They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale. This is one of the reasons the CMA’s independent panel group rejected Microsoft’s proposals and prevented this deal. While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision."
Later in the week, China’s State Administration for Market Regulation, or SAMR, unconditionally approved acquisition, two sources familiar with the situation told Dealreporter’s Shirley Feng, Lisha Zhou and Diane Alter.
CIRCANA: Circana analyst Mat Piscatella saying the results were overshadowed by the telegraphing of a fiscal 2025 release of the long-awaited "Grand Theft Auto VI," which is a year earlier than the firm anticipated. The firm added that Take-Two benefits from positive video game industry tailwinds, including the transition to digital distribution offering higher margins and the opportunity for incremental add-on sales and multi-player online services.
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OTHER STORIES TO WATCH:
- Nintendo said that "The Legend of Zelda: Tears of the Kingdom," which launched earlier this month exclusive on Switch, sold over 10M units worldwide in its first three days of availability [read more]
- Warner Bros. Discovery’s NetherRealm Studios announced "Mortal Kombat 1," a new entry in the long-running series, out September 19 for PC, Xbox Series X/S, PS5, and Switch [read more]
- Ubisoft’s (UBSFY) planned "Star Wars" game could arrive in early 2024, Kotaku reports [read more]
- Microsoft said that PC games from Xbox Game Studios and Bethesda will be available to play on streaming platform Boosteroid starting June 1 [read more]
Published first on TheFly
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