What You Missed This Week in Video Games

“Game On” is The Fly’s weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: This week’s major release is Nintendo’s (NTDOY) strategy game “Pikmin 4,” which launches July 21 exclusively for Switch consoles. The game will serve as the fourth main installment in the “Pikmin” franchise, and the first brand new mainline entry since 2013’s “Pikmin 3.”

MICROSOFT/ACTIVISION: The long saga over Microsoft’s (MSFT) proposed takeover of Activision Blizzard (ATVI) appears to be nearing an end, though not without some speed bumps along the way. After Judge Jacqueline Scott Corley issued a ruling that cleared the path for the deal to close, the Federal Trade Commission appealed the opinion to the United States Court of Appeals for the Ninth Circuit. A day later, however, the appeals court denied the bid, with Microsoft President Brad Smith saying the move brings the company “another step closer to the finish line in this marathon of global regulatory reviews.”

Following the failed appeal, Xbox boss Phil Spencer (SONY) signed a binding agreement to keep Activision’s “Call of Duty” franchise on PlayStation consoles following the closing of the Activision Blizzard deal. “We look forward to a future where players globally have more choice to play their favorite games,” Spencer said.

Meanwhile, the U.K.’s Competition Appeal Tribunal has agreed, with certain requirements that must be satisfied on Thursday, to halt Microsoft’s appeal of the Competition and Markets Authority decision to block its proposed deal, The Verge’s Tom Warren reported Monday. Both the CMA and the Xbox maker requested this action last week in order to give them more time to negotiate over a cloud gaming deal, the author said, noting that the CMA has also extended the date for its final order from July 18 to August 29.

Additionally, Bloomberg’s Leah Nylan and Dina Bass reported, citing people familiar with the transaction, that Microsoft and Activision will not likely close the deal by a Tuesday deadline. The companies do not intend to abandon the agreement and will continue seeking final regulatory approvals required for closing, the authors noted.

GAME PASS: Earlier this week, Microsoft introduced Xbox Game Pass Core, launching on September 14. “Game Pass Core is the evolution of Xbox Live Gold,” the company said. “Game Pass Core will give players access to our advanced multiplayer network, a select collection of over 25 games to play with friends around the world, and exclusive member deals, all for $9.99 per month or $59.99 per year. For over twenty years, Xbox players have been connecting via Xbox Live to compete, cooperate, and experience the world’s biggest online multiplayer games. In 2017, we introduced Xbox Game Pass which provided a curated library of games. Game Pass Core brings online play together with Game Pass in a new offering for gamers around the world. With this evolution, we’re saying farewell to Games with Gold. We wanted to use this opportunity to re-imagine how to include content with this subscription. We found that the answer to the most compelling catalog was to leverage select titles from our Xbox Game Pass catalog.” Among the 25 launch titles available on Game Pass Core are “Gears 5,” “Halo 5: Guardians,” “Fallout 4,” “Doom Eternal,” and “The Elder Scrolls Online: Tamriel Unlimited.”

SONY R&D: Last week, Nikkei Asia’s Keiichi Furukawa and Kentaro Tsutsumi reported that Sony intends to ramp up R&D spending in its gaming division as it seeks to develop technology in live services games and the emerging field of “extended reality.” The company will invest roughly $2.13B into R&D for its gaming business for the fiscal year ending March 2024. That figure, which will account for roughly 40% of its total R&D spending, now exceeds spending in electronics and semiconductors, the authors noted.

OTHER STORIES TO WATCH:

• Truist raised its price target on Roblox (RBLX) to $45 from $42 (read more)
• BofA raised the firm’s price target on Take-Two (TTWO) to $170 from $146 (read more)
• Warren Buffett’s Berkshire Hathaway (BRK.A) cut its Activision Blizzard stake before Judge Corley’s ruling, Reuters reportsSee the top stocks recommended by analysts >>

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