Microsoft-Activision deal contends with conflicting rulings

Yahoo Finance tech editor Dan Howley joins the Live Show to discuss the U.K.'s conflict with Microsoft's Activision Deal and Microsoft's future growth plans.

Video transcript

RACHELLE AKUFFO: Also want to shift to Microsoft's bid for Activision Blizzard. The UK shut down the deal, but then regulators in the EU approved it. So then what does this mean for the company overall?

DAN HOWLEY: Yeah. It's, kind of, a confusing place now, where we have the likes of Japan, the EU saying you can move forward with this deal, Microsoft can acquire Activision Blizzard for that $70 billion and, you know, start to become a larger player in the gaming space. Meanwhile, you have the UK as well as the US, with the FTC, basically saying, no, we don't want this deal to happen.

Microsoft and Activision Blizzard can appeal those. They can fight the lawsuit that the FTC has brought, they can appeal the decision by the Competition and Markets Authority in the UK if they are able to show in the US that the EU is correct in its ruling and that, look, we have these guarantees. We're going to work with Sony. We're going to work with Nintendo, with Nvidia.

We already have deals in place with Nintendo and Nvidia where we'll provide "Call of Duty"-- that's the game that they're all talking about-- with 10 years of content. Then, perhaps, the FTC can say, OK-- or a judge can say, OK, you're satisfying the concerns that the FTC has there.

If that happens, then what happens in the UK? Well, if Activision Blizzard and Microsoft can't appeal or lose the appeal there, some of the experts I spoke to say they might just carve out the UK on its own, set up a secondary business where they'll just operate as they do now, separate entities.

And on the global scale, you would have Microsoft and Activision being able to offer their services as one. So you would have-- basically, what Microsoft wants to do is make its Cloud Gaming platform the best in the world. Frankly, it is right now, as far as offerings go and capabilities. And then they'll be able to grow in the mobile gaming space, another part that a lot of people aren't talking about, but an important piece of this discussion.

Now, they would be able to do that everywhere else in the world. People would be able to play games on their smartphones that they otherwise wouldn't be able to do because of Cloud Gaming. And then the UK would just be left, kind of, in the dust. And perhaps, down the line, that would change.

But it looks like, if they are able to go forward in the US, then the UK will just be left behind.

RACHELLE AKUFFO: I mean, it does seem like that will be the case, especially if the US follows the EU's suit. You know, the UK will be there like Billy No Mates-- no friends. Eventually, I think they will come around. But I guess we'll have to see. Dan Howley, thank you so much.