Activision Blizzard Overwatch 2: Is free beta release sign of things to come as Microsoft ATVI takeover nears?
By Jenny McCall
10:51, 5 October 2022
The technology and gaming world has been taken by storm as it prepares itself for the impending acquisition by Microsoft (MSFT) of Activision Blizzard (ATVI). ATVI announced that the sequel to its billion-dollar hit Overwatch, will launch on Tuesday and unlike its predecessor’s high price tag, it will be free.
So, could this be a sign of things to come as the ATVI takeover nears its completion?
The ATVI stock price rose on Tuesday 4 October, the day of the announcement but since August the stock price has been down by 7%.
Activision Blizzard (ATVI) stock price has been down 7% since August
Could Overwatch 2 affect MSFT acquisition of ATVI?
Overwatch 2 is a first-person shooter game and a sequel to the 2016 Overwatch.
“Overwatch 2 is a free-to-play, team-based action game set in the optimistic future, where every match is the ultimate 5v5 battlefield brawl. Play as a time-jumping freedom fighter, a beat dropping battlefield DJ, or one of over 30 other unique heroes as you battle it out around the globe,” an Activision Blizzard statement said
Now that Overwatch 2 is live, could this be an indication of what gamers can expect from the Microsoft (MSFT) acquisition of ATVI?
The launch of Overwatch 2 has not come without its hiccups. It’s been tough to enjoy the game because of long virtual queue lines to start playing, alongside other issues with the server once gamers get into a match. ATVI said that a distribution denial-of-service attack (DDoS), was to blame for the issues.
“Unfortunately, we are experiencing a mass DDoS attack on our servers, and teams are working hard to mitigate/manage. This is causing a lot of drop/connection issues,” Blizzard Entertainment president Mike Ybarra tweeted on Tuesday.
As Overwatch 2 is only an online game, a DDoS attack that affects the servers is very difficult to manage and it has become an issue for the players and the developers.
Overwatch 2 is also the first game to be launched by ATVI since the announcement was made by MSFT that it will acquire the gaming group.
But despite this issue, MSFT launched a website this week that shows the benefits of its gaining division, Xbox’s acquisition of ATVI.
Unfortunately we are experiencing a mass DDoS attack on our servers. Teams are working hard to mitigate/manage. This is causing a lot of drop/connection issues. https://t.co/4GwrfHEiBE— Mike Ybarra (@Qwik) October 4, 2022
What is your sentiment on MSFT?
Regulatory and gaming issues - will MSFT back out?
“Players and developers are at the centre of Xbox. We want to enable people to play games anywhere, anytime and on any device. And developers deserve more options to build, distribute and monetize their ground-breaking games,” MSFT said in a statement.
“When we do this, we all win. That’s why we’re sharing more on the industry and how our acquisition of Activision-Blizzard fits into our gaming strategy.”
So, it appears that despite the ATVI Overwatch 2 issues this week, MSFT is still in full support of the acquisition.
But these are not the only concerns plaguing the deal. Regulatory problems have risen since the takeover was announced this year.
The UK's Competition and Markets Authority (CMA) has started its Phase 1 investigation into Microsoft (MSFT) and on 1 September released a statement.
Sorcha O’Carroll, Senior Director of Mergers at the CMA, said that if the CMA's current concerns are not addressed within five days (8 September), the CMA said it will explore this deal in an "in-depth phase 2 investigation" to reach a decision that works in the interests of UK gamers and businesses.
"The CMA has also received evidence about the potential impact of combining Activision Blizzard with Microsoft’s broader ecosystem. Microsoft already has a leading gaming console (Xbox), a leading cloud platform (Azure), and the leading PC operating system (Windows OS), all of which could be important to its success in cloud gaming," the CMA said in a statement.
"The CMA is concerned that Microsoft could leverage Activision Blizzard’s games together with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services."
Activision Blizzard (ATVI) stock is currently trading at around $75 per share, below the $95 bid by MSFT. This is an indication that investors are weighing in a possibility that the deal is blocked by global regulators.
As well as the UK, US regulators are also on the case, with the US Federal Trade Commission (FTC) looking into an antitrust review of the deal to determine if the takeover would give Microsoft’s Xbox gaming console an unfair competitive advantage.
The European Commission (EC) has also launched an antitrust investigation in to whether Microsoft (MSFT) would shut out its competitors from Activision Blizzard’s popular gaming library.
MSFT is pushing through with acquisitions of ATVI
But despite these problems last month, MSFT came out and dismissed any issues that maybe arising.
“But there were a few sweet spots including both Microsoft and Activision Blizzard (ATVI) following a Bloomberg interview with the Microsoft boss Satya Nadella who said he remained confident he’d get approval for his company’s takeover of the Call of Duty creator,” Danni Hewson, AJ Bell financial analyst wrote in a note.
“The UK’s competition watchdog has launched a second stage probe of the deal citing concerns about what it might mean for consumers. Will the $69bn deal get across the line? Investors like a fight and Nadella is clearly up for it himself.”