Sources within Activision have revealed that Activision Blizzard King CEO Bobby Kotick will remain in the company if they cannot finalize their deal with Microsoft.
As reported by Fox Business, these sources also state that Activision, like Microsoft, remains confident that the deal will push through. In fact, they believe that UK’s CMA, or Competition and Markets Authority, is the only regulatory body that matters when it comes to the case.
The CMA released a list of objections to the deal two days ago, with a particular focus on Call of Duty. In spite of this, Activision believes the regulator will ultimately side with them and allow the deal to push through.
MoffettNathanson’s Clay Griffin, who rated Activision an outperform, criticized the CMA for their decision. He shared this in a note to investors:
“We certainly think the decision, on both accounts, is the wrong anti-trust conclusion and that structural remedies – i.e., divesting CoD (Call of Duty), divesting the Activision segment, and/or divesting the Activision segment and the Blizzard segment in order to satisfy regulators is neither realistic nor necessary to ensure a fair and competitive gaming market. We won’t spend much time here; this is a complete non-sequitur for obvious reasons.”
Griffin also pointed out Microsoft’s promise to provide its competitors with a ten year contract to commit to bring Call of Duty to their platforms.
Griffin’s statement lines up with criticisms of one Douglas Melamed, an antitrust lawyer who stated that the case the FTC filed vs the deal is based entirely on anecdote. Basically, both have pointed out that the facts don’t support Sony’s claim that Call of Duty is so substantial to the industry that Microsoft acquiring the rights to it would harm it.
Microsoft and Activision believe the FTC case simply won’t prosper based on those facts. This is why their real concern right now is the CMA decision. Once the UK CMA makes that final decision, the companies involved will have no legal recourse to change their mind.
Kotick wasn’t shy about letting his feelings known about these regulators. He told the CMA that if tech company deals like the one Microsoft and Activision have pursued don’t get approved, it will not turn the UK into a new Silicon Valley, but a Death Valley.
Activision lists three companies under the UK on their website, including no less than Sledgehammer Games. We recently reported that Sledgehammer Games is working on Call of Duty 2023, bringing everything full circle.
