A move of this magnitude always raises concerns, even in the case of Microsoft, although there seems to be no reason why it should not succeed

Microsoft’s purchase of Activision Blizzard has completely shaken up the industry, and, as they say, nothing will ever be the same again. However, much uncertainty remains about the deal and its more direct consequences. In fact, there are doubts among analysts today as to whether a move of such magnitude can materialise, although they all generally believe that it will not be a problem.

The website MarketWatch has tackled the issue with a series of interviews with different financial analysts. Starting with Activision Blizzard’s stock market valuation after the deal was announced. According to Cowen Group, the gap between the purchase price and the current share price indicates that investors see a 33% chance of the deal being blocked. Doubts, yes, but there is plenty of room for optimism with the bureaucracy that is currently pending for the rest of the technology companies, in relation to Alphabet (Google), Apple and Meta (Facebook).

As Microsoft itself wanted to highlight yesterday, the merger would not give the Redmond giant a dominant position in the sector, as it is still behind in business figures with respect to Tencent Games and PlayStation, but it would certainly give a significant competitive advantage and preference to Xbox as a rival platform, something that the Japanese company could oppose during the regulatory process, according to Cowen Group, seeking a successful deal for its interests.

In favour of Microsoft, David Hoppe, partner at law firm Gamma Law, said. “The acquisition is another example of ‘vertical integration [like Microsoft’s purchase of Bethesda]: a console maker takes the reins from a developer. Of course, this is the biggest deal in the history of the industry, but historically the courts have not been opposed to these transactions”. Speaking to IGN, Hoppe adds that it is very difficult for the US Department of Justice to see this as a horizontal expansion, where two direct competitors join forces when the products are creative works, each unique in their own way.

Against Alex Harman of Public Citizen, a consumer advocacy organisation. “There is no way the Federal Trade Commission and the Department of Justice should allow this merger to go through. If Microsoft wants to bet on the metaverse, it should invest in new technology, not swallow a competitor“. All in all, there are still several months to go, and the bureaucracy will have to be watched. The deal is expected to be completed before June 2023.

Source: eseuro