We now have more details on where the Microsoft Activision deal is going over in the UK.
Yesterday, we had reported on the Competitions Appeal Tribunal approving the request to pause the appeal hearing. Microsoft and the CMA jointly made this request, so that they could reach a settlement on the case by themselves.
Now, thanks to Video Games Chronicle, we understand that the appeals court gave the two parties two months to reach that settlement. It’s clear that that is more than enough time for the two to settle, but this was apparently the quickest time frame that the appeal judge could give to both parties, given UK’s rules.
Strangely enough, Microsoft apparently asked for even more time. The ironic reason that they were not granted this request, as the judge had pointed out, was that it was quite clear that the deal was going through, after Sony signed a deal with Microsoft to go in effect after the merger was finalized.
Now, why would Microsoft want to delay a process that already cost them millions of dollars and took months? Not to mention one that forced the intervention of Microsoft’s higher-ups, including no less than president and master negotiator Brad Smith?
To a degree, this seems to be Microsoft overcorrecting, after they had tried hard to end regulation much earlier. It seems they expect the CMA to be combative of such deals moving forward, so they want to set precedents and get a feel of what the UK regulator wants.
Ultimately, the delay is for Microsoft to better understand the CMA, so they can better address whatever concerns the regulator will have when the company makes more acquisitions in the future. Of course, those acquisitions may or may not be for video game companies.
With that in mind, it also seems highly likely now that Microsoft will ask for an extension on their set deadline for the deal, that is supposed to be for today, July 18, 2023.
The stated intent of setting a deadline and a breakup fee is for Microsoft to ensure that Activision won’t get swept up in the last minute by another company, say Sony. There is also the possibility that without another buyer, Activision simply sours on the deal.
But from what we’ve seen and heard from both parties, that isn’t likely to be the case. There is a huge chance that this deal still gets extended for a few months more, but this time, with a clearer sense of its inevitability.
