Why Is Activision Blizzard Stock Trading Higher Friday?

Microsoft Corp MSFT has revamped its acquisition strategy for Activision Blizzard Inc ATVI after facing initial regulatory hurdles in the U.K. 

The tech giant's initial $69 billion bid to acquire the gaming company was met with resistance, prompting a reevaluation of the deal's terms.

Earlier in 2022, Microsoft's ambitious acquisition faced objection from the U.K.'s Competition and Markets Authority (CMA) due to concerns over the potential dominance of the emerging cloud gaming sector. 

However, with the revised proposal, Microsoft seems poised to navigate these regulatory waters.

The initial apprehension from the CMA stemmed from the potential impact on the burgeoning cloud gaming industry. 

There were fears that Microsoft might restrict key Activision titles, like "Call of Duty," to its platforms exclusively. 

Microsoft's updated proposal includes relinquishing cloud rights for current and upcoming Activision games for a 15-year years. Before finalizing the Activision deal, the company will transfer the rights to UbiSoft Entertainment Inc UBSFY.

Microsoft had cut similar deals with Microsoft forged deals with Nvidia Corp (NASDAQ: NVDA) and Sony Group Corporation SONY to win support for the merger.

By divesting cloud rights to Ubisoft, Microsoft aims to maintain a level playing field in the cloud gaming arena. 

Ubisoft can license Activision's content under various business models, including subscription-based services. 

Additionally, Microsoft has committed to releasing game versions compatible with operating systems beyond its own Windows.

Chris Early, Senior VP of Strategic Partnerships and Business Development at Ubisoft, expressed enthusiasm about the revised deal. 

He emphasized Ubisoft's commitment to providing gamers diverse ways to access and enjoy top-tier gaming brands.

The CMA's decision on the revised proposal is eagerly anticipated, with a verdict expected by October 18. 

While the current terms differ significantly from the initial proposal, the CMA's final approval remains uncertain.

Price Actions: ATVI shares traded higher by 1.95% at $94.15 premarket on the last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.