On Thursday, Microsoft and Activision-Blizzard cleared the second-biggest hurdle remaining in their plan to complete a $68.7 billion acquisition deal: existing shareholder buy-in.
ATVI shareholders have voted overwhelmingly in favor of approving Microsoft’s bid to acquire Activision-Blizzard, and a company announcement counted over 98 percent of shareholder votes in the “yes” column.
On a dollars-and-cents level, anyone currently holding on to Activision stock is likely interested in the potential cash windfall coming their way should the deal be completed. Ahead of the shareholder vote on Thursday morning, Activision stock prices were trading around $76 per share, while Microsoft’s acquisition terms include a buyout amount of $95 per share.
FTC is next, and critics allege “undue concentration of market power”
That share price has been steadily dipping since an upward spike on January 18, the same day Microsoft and Activision announced their potential deal. As Bloomberg points out, the gap between the current trading price and the acquisition valuation is higher than many significant mergers and acquisitions hovering in the United States, particularly the impending Twitter buyout spearheaded by Elon Musk. Such gaps often indicate a lack of market confidence in a proposed deal surviving regulator scrutiny.
Sure enough, Federal Trade Commission approval remains the final likely hurdle for Microsoft’s acquisition deal to survive before the deal can begin taking official shape, and as of press time, reports indicate the FTC will take lead in performing an antitrust review of the deal. This follows a January 18 announcement (yes, the same day that Microsoft announced its acquisition intentions) that the FTC and US Department of Justice sought public comment in their efforts “to better detect and prevent illegal, anticompetitive deals in today’s modern markets.”
Soon after, critics of the proposed Microsoft-Activision merger published open letters decrying the deal and calling out its antitrust aspects. One such letter, posted on March 1 and signed by 15 advocacy groups, alleged that the deal “may lead to an undue concentration of market power when viewed as a vertical or horizontal merger, threaten data privacy and security, undermine consumer protection online, impinge on the consumer right to repair and exacerbate worker disempowerment and wage suppression.” The letters’ claims about Microsoft’s grip on the video gaming and cloud computing markets were arguably exacerbated by Microsoft’s bullish financial disclosures earlier this week, which pointed to continued jumps in revenue in both of those markets.
Should the acquisition clear all regulatory scrutiny, Microsoft will arguably still have significant Activision-Blizzard fallout to deal with, primarily in the form of ongoing legal pressure over widespread accusations of pay disparity and sexual harassment throughout Activision Blizzard’s network of game studios. That case entered a new, bizarre phase earlier this month when a top California state lawyer on the case resigned in protest, pointing to Governor Gavin Newsom’s decision to fire a lead attorney in the agency handling the state’s lawsuit.
The games keep coming
Yet Activision Blizzard continues barreling full steam ahead as far as new video game launches and teases are concerned. Hours after the Thursday shareholder vote concluded, the company announced a countdown for a new WarCraft game announcement at 1 pm ET on Tuesday, May 3. The game in question is slated to launch on mobile phones, and Blizzard has teased “exciting news for heroes of Azeroth looking to take their adventures on the go.”
That language suggests some kind of full-fledged “adventure” in the WarCraft universe, as opposed to a smartphone-style puzzle or idle game, but it’s not necessarily a clear hint of what’s to come. For a better guess, we turn to Bloomberg reporter Jason Schreier, who suggested at gaming forum ResetERA earlier this week that Blizzard is currently working on at least two smartphone games in the WarCraft universe, and the ones he knows about are “one Pokémon Go [and] one other Clash-ish one,” referring to either Clash of Clans or Clash Royale.
This news follows the long-awaited beta for Overwatch 2 finally going live on Tuesday, whose Twitch streams immediately broke viewership records for Blizzard games. Its concurrent viewership count exceeded 1.4 million this week, arguably due to a Twitch promotion that fed free beta keys to viewers as “drops” so they could access the beta on their own PCs during the three-week test. And in easily the least surprising Activision-related news, the company also unveiled the first logo and tease of the next Call of Duty video game on Thursday, dubbed Call of Duty: Modern Warfare 2—apparently a sequel to the CoD spinoff’s 2019 reboot, as opposed to a remaster of the original 2009 sequel (not confusing at all, nope).