Yahoo Finance tech editor Dan Howley joins Yahoo Finance Live to discuss the latest on Microsoft’s proposed acquisition of Activision-Blizzard.
Video Transcript
DAVE BRIGGS: Microsoft is set to defend its $69 billion tie-up with Activision Blizzard in front of the European Union and national antitrust officials on Tuesday. Our tech editor Dan Howley here to discuss this. Dan, some are calling it a last-ditch effort from Microsoft. What are your expectations?
DAN HOWLEY: That’s right. This is kind of their move where they’re trying to defend that $69 billion attempted acquisition of Activision Blizzard in front of the EU. It’ll be a closed-door hearing, and essentially what they’re going to do is try to say, look, we recognize that there are some complaints about the possible acquisition, whether that’s as far as opportunities go for competition, but we’re going to give XYZ assurances.
So some of those are that it’s willing to offer Sony, its chief rival in the gaming space, access to the “Call of Duty” franchise for 10 years. And, you know, this is something they’ve already done with Nintendo. Nintendo has agreed to that. Problem is “Call of Duty” isn’t really a Nintendo game, so it’s kind of meaningless overall. I don’t think a lot of people– well, you can’t fire up “Call of Duty” on a Switch right now. It just can’t handle it.
So it really comes down to Sony, and this entire argument is based on, you know, what company gets control of “Call of Duty.” Yes, Activision Blizzard has “World of Warcraft” and “Diablo,” a number of other games. They’re also the owners of the King mobile business with “Candy Crush” under that. So, you know, they have other games, but it’s really “Call of Duty,” and the reason for that is because it’s just a cash cow for them.
When the most recent version came out, it exceeded a billion dollars in sales in 10 days. They also have their free-to-play “Call of Duty– Warzone.” They’re also coming out with a mobile version of that as well. And while those are free, there are in-game transactions that do do particularly well for Activision Blizzard.
So it’s all about who gets to have “Call of Duty.” And so Microsoft’s plan would likely be to put that on its Game Pass service and make that cloud offering more appealing to consumers. They don’t touch Sony as far as overall gaming revenue or Tencent, which those are the number one and two. But what they’re trying to do is build out their cloud capabilities so that they’re secure for the future and they get ahead of everyone else. And, frankly, they’re doing that right now. You know, they do have the market share as far as cloud goes.
How this goes, though, for them as far as Activision Blizzard, I mean, it’s really up in the air. We have the FTC knocking on the door as well. So it’s not looking too too good for Microsoft.
DAVE BRIGGS: All right, Dan Howley, should be an interesting situation. Thank you, my friend.
