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Microsoft reportedly reassures employees that its gaming strategy will continue if Activision Blizzard fails -By Fsk

What happens if Microsoft’s proposed $69 billion buyout of Activision Blizzard fails, as seems clearly possible after the Competition and Markets Authority’s surprise decision to block the deal?

That’s a question Xbox boss Phil Spencer reportedly answered to employees in an all-hands meeting on Thursday, according to Bloomberg (paywall).

According to Bloomberg, Spencer stressed that Microsoft remains committed to securing the deal while acknowledging the damaging impact of this week’s events. The company, along with Activision Blizzard, plans to appeal.

Newscast: Can Microsoft’s Activision Blizzard Appeal Succeed?

Spencer explicitly told employees that the Activision Blizzard acquisition is meant to accelerate Microsoft’s gaming plans, but it’s not the be-all and end-all of the company’s gaming strategy, even without the firm behind Call of Duty. Go ahead”, World of Warcraft and Candy Crush.

Spencer’s comments come at a difficult time for Xbox, which has seen console sales struggle. This week, Microsoft reported a four percent drop in gaming revenue and a 30 percent drop in Xbox hardware revenue. With a lack of big-hitter exclusives and stalling Game Pass growth on consoles in recent years, Microsoft’s buyout of Activision Blizzard was seen as a key shot in the arm for its gaming efforts amid stiff competition from Sony and Nintendo. Was.

In particular, Activision Blizzard-owned Candy Crush maker King was seen as a key component in Microsoft’s gaming strategy, which includes plans to launch an App Store for games on mobile devices. Microsoft currently has a limited gaming presence on mobile.

Meanwhile, Activision Blizzard boss Bobby Kotick, who has heavily criticized the CMA decision in interviews this week, addressed the same issue in a conversation with CNBC.

Asked whether Activision Blizzard could go it alone should the deal fall apart, Kotick acknowledged the potential challenges.

“Look, we’re a strong company,” Kotick insisted. “And I think, you know, whether the deal goes through or not, and we fully expect it to go through, but if it doesn’t, we’ll continue to operate as an independent company.

“It becomes more challenging when you are operating in a global market, where in Japan, you do not have free access to the consumer, where as in China, you need a joint venture to be able to operate have to enter.

“You know, fair competition should start in the countries where we operate, like the UK and the US. And I think, you know, we should focus more on things like a reciprocal trading framework that really gives us allowed to compete.” more effectively in countries such as China and Japan. Not stopping the competition.”

Should Microsoft miss its July 18 merger deadline, it will reportedly pay Activision a $3bn termination fee. Kotick was asked what the company would do with the money, should it get it.

“If it’s not met, you know, by the end of the year, I think we’ll have something like $18 billion in cash. And, you know, we have, I think if you See, in our 30-year history, we have been extremely well capitalized for the benefit of our shareholders and we will continue to do so.”

what happens next? Microsoft must now prove that the CMA mishandled its initial investigation as part of the appeal, which, if successful, will see the matter come back to the CMA once again for further deliberations . Here are more details on Microsoft’s next steps.