The Microsoft Activision-Blizzard Deal Will Pass But With Further Consessions, Analyst Believes

Aernout van de Velde
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The highly-debated Microsoft Activision-Blizzard deal is expected to pass, but not without further concessions on Microsoft's part.

At least, that's what analyst Piers Harding-Rolls from Ampere Analysis believes. Each new year, asks several known industry analysts to share their predictions for the coming year, and one of the more significant predictions comes from Harding-Rolls.

The elephant in the room? Obviously, it's the planned merger between Microsoft and publisher Activision-Blizzard, which has been the talk of the town for quite some time now. Last month, the FTC sued Microsoft to block the transaction, and recent reports claim that Microsoft is willing to offer concessions to shorten the regulatory process and complete the deal. As covered by Reuters, a brief pre-trial hearing by phone took place yesterday, and according to FTC attorney James Weingarten, there are currently no "substantive" settlement discussions underway between the FTC and Microsoft.

The rumored concessions are expected to be an essential factor for the deal to complete, as highlighted by Harding-Rolls in his prediction for this year.

"Will the Microsoft-ABK deal go ahead?", the analyst writes. "Yes, but with further concessions. Those could be focused on Game Pass inclusion of games and title availability on other services. I think there is a higher chance of the deal closing with concessions than of it being halted."

As for when the merger will finalize - this depends if the case will end up in court. If this is indeed the case, the deal might very well not be completed before the second half of 2023.

"When will the deal close? It could drag on into the second half of 2023 especially if the FTC's case goes to court. If Microsoft agrees concessions and avoids court, the first half of 2023 is possible."

The analyst also had something to say about Microsoft's and Sony's subscription services with him expecting that Xbox Game Pass will grow significantly this year.

"The biggest games subscription services missed their growth targets in 2022, but I think there is reason to be positive in 2023. I'm expecting Game Pass to grow significantly in 2023 on the back of highly anticipated first-party games entering the service. If the ABK deal goes ahead, expect to see more mobile games in Game Pass. I'm also expecting Sony to secure more of its own third-party day one releases for PS Plus Extra and Premium and that will help drive adoption."

Interesting predictions although it should be noted that they are just that - predictions. On the other hand, plenty of Harding-Rolls' 2022 predictions turned out to be correct.

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