Microsoft acquisition of Activision Blizzard threatened by FTC as shareholders approve...

midian182

Posts: 7,895   +82
Staff member
What just happened? Activision Blizzard's shareholders have approved Microsoft's $69 billion buyout of the company, with a massive 98% voting in favor of the acquisition. But Wall Street is still betting on the deal falling through.

Bloomberg reports that shareholders approved Microsoft's offer of $95 per share. The stock price had hit $82 following news of the acquisition, meaning anyone who bought then would have been guaranteed $13 per share profit when the deal completed. However, the current share price has fallen to around $77, suggesting investors aren't confident the merger will be finalized.

As reported back in February, the uncertainty stems from the US Federal Trade Commission (FTC) looking into the acquisition. Buying Activision Blizzard would make Microsoft the third-largest video game company after Tencent and Sony, and that's brought the attention of regulators examining potential antitrust issues.

A group of organizers last month urged the FTC to monitor Microsoft's takeover, warning that it could have "anticompetitive horizontal effects." The statement noted that the deal could also have a detrimental impact on the unionization efforts of some Blizzard staff, noting that no US Microsoft staff belong to unions.

The FTC played a significant part in blocking Nvidia's acquisition of Arm earlier this year, having previously sued to stop the purchase from going through. Microsoft also has to gain approval from governments in the European Union and China.

Not all Activision Blizzard shareholders want the buyout to complete. SOC Investment Group, an activist group with a small stake, has encouraged other shareholders to downvote the deal. It believes the company is being undervalued due to "the board's incompetent handling" of the sexual harassment lawsuits it has faced and would rather the board be replaced so Blizzard can rebuild its damaged reputation.

The merger has until June 30, 2023, to close.

h/t: PC Gamer

Permalink to story.

 

Dimitriid

Posts: 2,206   +4,245
Activision is not coming back on their own if the purchase falls through. So Microsoft's case to the FTC seems to be pretty compelling "Either you let us buy them or you let Sony, a Japanese corporation, buy them since they won't survive long enough on their own to avoid that"

I know the FTC is not supposed to care about policy matters like that but still, it's probably going to weight in more heavily than anything legal.
 

Burty117

Posts: 4,488   +2,694
Has anyone played the Overwatch 2 beta? I have, I get some PvE content isn't in it but if that's all they were able to produce, 3 maps and a new hero. Same game engine, basically same UI, 95% content from the first game

If that's all blizz can make over 3 years, well, that doesn't bode well for the next diablo or WoW expansions.
 

George Keech

Posts: 175   +291
Activision is not coming back on their own if the purchase falls through. So Microsoft's case to the FTC seems to be pretty compelling "Either you let us buy them or you let Sony, a Japanese corporation, buy them since they won't survive long enough on their own to avoid that"

I know the FTC is not supposed to care about policy matters like that but still, it's probably going to weight in more heavily than anything legal.
I was thinking this either MS buy AB and basically rebrand or rebirth them with a massive shake up or they are probably going to have a slow death, they are not the same firm they where before.

I almost think it would be fitting for AB to be split with Acti taking COD etc and Blizz being bought with all there IP as most people seem concerned re King and COD parts of the purchase.
 

dangh

Posts: 579   +914
I don't think that puting such large company in hands of single megacorporation have single positive case for the market. Activision is doing well (apart of some scandals) and they will continue doing well. The only thing MS will use them for is to limit the availability of their games on other platforms and further promote GaaS which is - as most of the 'as service' - very dangerous move in a long run.

And do not worry - neither Sony or Nintendo will have resources to buy them, and they do not usually do such large acquisition of multiplatform companies (or just buying a bunch of IPs).
 

Squid Surprise

Posts: 5,335   +4,980
I don't think that puting such large company in hands of single megacorporation have single positive case for the market. Activision is doing well (apart of some scandals) and they will continue doing well. The only thing MS will use them for is to limit the availability of their games on other platforms and further promote GaaS which is - as most of the 'as service' - very dangerous move in a long run.

And do not worry - neither Sony or Nintendo will have resources to buy them, and they do not usually do such large acquisition of multiplatform companies (or just buying a bunch of IPs).
First of all... Sony has plenty of resources to buy them - but not as much as MS does obviously...

Second: Activision is doing well? Said absolutely nobody... except you for some reason...
 

dangh

Posts: 579   +914
First of all... Sony has plenty of resources to buy them - but not as much as MS does obviously...

Second: Activision is doing well? Said absolutely nobody... except you for some reason...
Look at the financial report and check if they really have 60 billions to spend on a company. Activision is like 1/3 of Sony. Whole Sony (cameras, tv's, insurance, chip production and so on), not the just the gaming department.

Activision is doing well. They keep having solid revenue and financialy are in good condition. Even if the games werent that good anymore, but really, in this area MS have nothing to help with anyway.
 

Squid Surprise

Posts: 5,335   +4,980
Look at the financial report and check if they really have 60 billions to spend on a company. Activision is like 1/3 of Sony. Whole Sony (cameras, tv's, insurance, chip production and so on), not the just the gaming department.

Activision is doing well. They keep having solid revenue and financialy are in good condition. Even if the games werent that good anymore, but really, in this area MS have nothing to help with anyway.
Sony's revenue was over 80 billion last year... and their profits were close to 5 billion... with PS5 production ramping up, this will only go up this year and next...if they wanted to, they could purchase Activision.... not saying they WOULD... just that they COULD....

As for Activision... here's their last financial report...

See those ()? That means NEGATIVE.... most people don't like to see those in reports...
 

Kirby1

Posts: 162   +264
This merger will happen. Microsoft's gaming division will still be smaller than Sony's. That, and the stock isn't down due to merger fears... all tech stocks have taken a beating recently.
 

Nobina

Posts: 3,775   +4,198
Has anyone played the Overwatch 2 beta? I have, I get some PvE content isn't in it but if that's all they were able to produce, 3 maps and a new hero. Same game engine, basically same UI, 95% content from the first game

If that's all blizz can make over 3 years, well, that doesn't bode well for the next diablo or WoW expansions.
I saw people streaming it and at first, I thought they are just playing OW, only later did I realise it's supposed to be OW2 and I'm not surprised I heard changes were gonna be minimal. It's pathetic they call this OW2 when it's more like an average update.


Hey you just described Elden Ring!
It's quite different from other Souls titles since it's open-world but it kind of is a CoD of single-player games.
 

Burty117

Posts: 4,488   +2,694
I saw people streaming it and at first, I thought they are just playing OW, only later did I realise it's supposed to be OW2 and I'm not surprised I heard changes were gonna be minimal. It's pathetic they call this OW2 when it's more like an average update.
I'm looking forward to seeing how they price it. No way can they charge more than £10 for that. It's barely a small DLC for the first game. let alone a whole separate AAA £40+ worth of game.
 

NintPlayBox

Posts: 55   +45
I don't think that puting such large company in hands of single megacorporation have single positive case for the market. Activision is doing well (apart of some scandals) and they will continue doing well. The only thing MS will use them for is to limit the availability of their games on other platforms and further promote GaaS which is - as most of the 'as service' - very dangerous move in a long run.

And do not worry - neither Sony or Nintendo will have resources to buy them, and they do not usually do such large acquisition of multiplatform companies (or just buying a bunch of IPs).
I'm sure you wouldn't be saying that if it was Sony or Nintendo doing the acquisition.
 

Hexic

Posts: 1,216   +1,898
TechSpot Elite
I'm looking forward to seeing how they price it. No way can they charge more than £10 for that. It's barely a small DLC for the first game. let alone a whole separate AAA £40+ worth of game.

If they introduce more than one new hero, more than 3 maps, make a $hitload of changes and updates from current beta, AND add clans & amazing single player.. I'd pay like.. $30USD.

I'd love to see more content in the official release. I'm very skeptical, but a tiny bit hopeful. It still is very much in beta.
 

dangh

Posts: 579   +914
Sony's revenue was over 80 billion last year... and their profits were close to 5 billion... with PS5 production ramping up, this will only go up this year and next...if they wanted to, they could purchase Activision.... not saying they WOULD... just that they COULD....

As for Activision... here's their last financial report...

See those ()? That means NEGATIVE.... most people don't like to see those in reports...
Thats not how this works;)
total net worth of sony is around 160 billions. Revenue means nothing except number of pushed trhough products. Not sure where you got Sony's statement for 2021 (it should be released today or so but not available now), but even with 6 billions net income it is 10 times less than purchase value of Activision. So buying Activision would eat investment money for like 10 years... nobody in Sony would do that.

As for Activision report you forgot the important stuff
"For the year ended December 31, 2021, Activision Blizzard’s net bookingsB were $8.35 billion, as compared with $8.42 billion for 2020. In-game net bookingsC were $5.10 billion, as compared with $4.85 billion for 2020."

"Activision Blizzard delivered record full-year GAAP results in 2021, growing
GAAP revenue 9% year-over-year, GAAP operating profit 19% year-over-year andGAAP EPS 22% year-over-year"

This shows that even with worse last quarter, they made more transactions and money than in the previous year.

And yes, () means negative, but PLEASE read on what category is this loss. This doesn't mean the year ended in a loss ;)

Long story short - Sony can't afford such huge investemnt, Activision is still doing well (best year ever), and buyout by megacorpo is not good for any competition.
 

dangh

Posts: 579   +914
I'm sure you wouldn't be saying that if it was Sony or Nintendo doing the acquisition.
lol. I'd be saying exactly the same thing. Nothing good will come if any company going to buy such large fragment of a gaming market. Microsoft already made a huge acquisition with Bethesda which may result in locking away well established IPs, and doing the same with Activisiona and potentially other large publishers will have potential of destroying balance, competition and further pushing gaas on all still available platform.

Where I see unhealthy tendencies, you are coming with "Whatabout" and trying to make a strawman here. Dont be a fanboy and - if you want to discuss - give me a reason why you think you'd like have so many publisher under a single megacorporation, hmm?
 

Squid Surprise

Posts: 5,335   +4,980
Thats not how this works;)
total net worth of sony is around 160 billions. Revenue means nothing except number of pushed trhough products. Not sure where you got Sony's statement for 2021 (it should be released today or so but not available now), but even with 6 billions net income it is 10 times less than purchase value of Activision. So buying Activision would eat investment money for like 10 years... nobody in Sony would do that.

As for Activision report you forgot the important stuff
"For the year ended December 31, 2021, Activision Blizzard’s net bookingsB were $8.35 billion, as compared with $8.42 billion for 2020. In-game net bookingsC were $5.10 billion, as compared with $4.85 billion for 2020."

"Activision Blizzard delivered record full-year GAAP results in 2021, growing
GAAP revenue 9% year-over-year, GAAP operating profit 19% year-over-year andGAAP EPS 22% year-over-year"

This shows that even with worse last quarter, they made more transactions and money than in the previous year.

And yes, () means negative, but PLEASE read on what category is this loss. This doesn't mean the year ended in a loss ;)

Long story short - Sony can't afford such huge investemnt, Activision is still doing well (best year ever), and buyout by megacorpo is not good for any competition.
There year over year was down about 20%... how do you qualify that as "doing well"...

And Sony has plenty of cash, profits, revenue to purchase Activision - do you think companies buy other companies with just cash on hand?!?!?!
 

dangh

Posts: 579   +914
There year over year was down about 20%... how do you qualify that as "doing well"...

And Sony has plenty of cash, profits, revenue to purchase Activision - do you think companies buy other companies with just cash on hand?!?!?!
They (activision in your link) said, and all financial sit are saying, 2021 was best financial year ever for Activision. Really, it is written clearly there and even if it is a bit worse than result from middle of pandemic when everyone was staying at home, it is their best result...

As for the Sony, where huge amount of income is made by non - gaming branches, sacrificing 60 billion of revenue (meaning no investment in all R&D of other branches) to acquire 8 billion revenue company makes no financial sense. They would cripple themselves and still would have to publish all titles on multiplatform to at least keep this 8 bilions of income. MS do not have this issue, because that is a pocket moeny for them and just an investment to push GAAS delivery and take majority of the market - menaing, he will be one to dictate terms.
 

Squid Surprise

Posts: 5,335   +4,980
They (activision in your link) said, and all financial sit are saying, 2021 was best financial year ever for Activision. Really, it is written clearly there and even if it is a bit worse than result from middle of pandemic when everyone was staying at home, it is their best result...

As for the Sony, where huge amount of income is made by non - gaming branches, sacrificing 60 billion of revenue (meaning no investment in all R&D of other branches) to acquire 8 billion revenue company makes no financial sense. They would cripple themselves and still would have to publish all titles on multiplatform to at least keep this 8 bilions of income. MS do not have this issue, because that is a pocket moeny for them and just an investment to push GAAS delivery and take majority of the market - menaing, he will be one to dictate terms.

Note how other than one really nice quarter... the numbers tend to be going DOWN?

And once again, companies don't buy other companies with just cash on hand... there tend to be stock options, credit, etc...

And, once again, I didn't say Sony would or SHOULD buy Activision... merely that they COULD...
 

dangh

Posts: 579   +914

Note how other than one really nice quarter... the numbers tend to be going DOWN?

And once again, companies don't buy other companies with just cash on hand... there tend to be stock options, credit, etc...

And, once again, I didn't say Sony would or SHOULD buy Activision... merely that they COULD...
Did you not, that this 'down' is actually way up from time before covid?
And companie s don't buy with cash, that's obvious, but as well they need to somehow provide enough assets to back up the buy-out. Sony total assets (stocks, building, IPs, patents) is around 250 billions across 6 different branches. So they would have to pay 1/5 of the total asets worth.

And yes, I said they could, but that would crippled them severilly and probably killed them as this investment would not return in years to come.
 

Squid Surprise

Posts: 5,335   +4,980
Did you not, that this 'down' is actually way up from time before covid?
And companie s don't buy with cash, that's obvious, but as well they need to somehow provide enough assets to back up the buy-out. Sony total assets (stocks, building, IPs, patents) is around 250 billions across 6 different branches. So they would have to pay 1/5 of the total asets worth.

And yes, I said they could, but that would crippled them severilly and probably killed them as this investment would not return in years to come.
Covid was GOOD for gaming companies - so yes, they are higher than pre-Covid... but the fact that they are on a downwards trend is NOT good...