The purchase of Activision may be canceled by … Microsoft?

Insiders at Activision fear that Microsoft will cancel the agreement.

Some insiders and analysts said Microsoft likely did not expect this level of scrutiny from authorities. The mounting pressure has sparked internal disagreements between the two companies, sources familiar with the matter said, although Activision and Microsoft publicly put on a good show and insist the deal will go through.

At issue are the promises — or lack of promises — that Microsoft is offering to antitrust regulators and rivals like Sony, which have strongly opposed the deal.

Microsoft Gaming CEO Phil Spencer has publicly stated that the company plans to continue publishing Activision’s popular “Call of Duty” series on PlayStation, as well as potentially bringing it to other consoles such as Nintendo. Switch.

But Microsoft has refused to offer EU regulators legal remedies ahead of the full investigation, which starts on November 8. Microsoft had the opportunity to offer the EU so-called guarantees, such as a formal promise to keep “Call of Duty on PlayStation”, but refused to do so.

Activision CEO Bobby Kotick would prefer that Microsoft take a more dovish stance toward regulators now that the game maker’s shareholders will be paid regardless of whether Microsoft makes concessions or not.

Some analysts and critics say the ability to keep Activision games exclusive is a big part of Microsoft’s lure for the takeover, despite the company’s claims to keep “Call of Duty” on PlayStation. Making public promises is one thing, but being legally required to drop exclusive offers could be a deal-breaker, sources said.

“Microsoft’s decision to buy Activision is purely to make games exclusive,” said Dan Ives, managing director of Wedbush Securities. “If giving up exclusivity is one of the necessary concessions, Microsoft will have to think long and hard about whether it’s worth it.”

“Microsoft is not buying this asset so other companies can use Activision’s games as if nothing happened,” Ives added. “It all depends on what the concessions will be.”

Clay Griffin, research analyst at MoffettNathanson, also said, “Microsoft cannot be forced to agree to draconian terms.”

If the takeover does not go through, Microsoft must pay Activision 3 billion.

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