What will happen if the takeover proposed by Microsoft for 69 billion dollars of Activision Blizzard fails, as seems quite possible following the opinion of the Authority of competition and markets? shock decision to block the agreement?
It’s a question Xbox boss Phil Spencer reportedly answered staff during a town hall meeting on Thursday, according to Bloomberg (pay wall).
According to Bloomberg, Spencer stressed that Microsoft remains committed to completing the deal while acknowledging the adverse impact of this week’s events. The company, alongside Activision Blizzard, is considering an appeal.
Newscast: Can Microsoft’s Activision Blizzard deal appeal succeed?
Spencer apparently told staff that the acquisition of Activision Blizzard was intended to accelerate Microsoft’s gaming plans, but is not the be-all and end-all of the company’s gaming strategy, which “would advance “even without the company behind Call of Duty, World of Warcraft and Candy Crush.
Spencer’s comments come at a tricky time for Xbox, which has struggled in console sales. This week, Microsoft reported games revenue down 4% and Xbox hardware revenue down 30%. With a lack of major exclusives in recent years and stagnant Game Pass growth on console, Microsoft’s takeover of Activision Blizzard was seen as a crucial blow in the arm of its gaming efforts amid fierce competition from Sony and Nintendo.
Specifically, King, the maker of Candy Crush owned by Activision Blizzard, was seen as a key part of Microsoft’s gaming strategy, which includes plans to launch an app store for games on mobile devices. Microsoft currently has a limited presence in mobile gaming.
Meanwhile, Activision Blizzard boss Bobby Kotick, who strongly criticized the CMA’s decision in interviews this week, addressed the same issue in a conversation with CNBC.
When asked if Activision Blizzard could go it alone if the deal fell apart, Kotick admitted the potential challenges.
“Look, we’re a solid company,” Kotick insisted. “And I think, you know, whether the deal comes through or not and we expect it to come through, but if it doesn’t, we continue to operate as an independent business.
“It becomes even more difficult when you operate in a global market where in Japan you don’t have free consumer access, whereas in China you have to enter a joint venture in order to operate.
“You know, fair competition should start in the countries that we operate in, like the UK and the US. And I think, you know, we should focus more on things like a reciprocal trading framework that will actually allow us to compete in countries like China and Japan more effectively.Not to inhibit competition.
If Microsoft missed its July 18 merger deadline, it would owe Activision a $3 billion termination fee. Kotick was asked what the company would do with that money, if it got it.
“If that wasn’t done, you know, by the end of the year, I think we’ll be sitting on something like $18 billion in cash. And, you know, we have, I think if you look at our 30-year history, we have deployed capital very well to benefit our shareholders and we will continue to do so.”
What happens next? Microsoft must now seek to prove that the CMA mishandled its original investigation in an appeal which, if successful, would see the case return to the CMA again for further deliberation. Learn more about Microsoft’s next steps.
Article source https://www.eurogamer.net/microsoft-reportedly-reassures-staff-its-gaming-strategy-will-continue-if-activision-blizzard-buyout-fails