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Activision shares jump as UK regulators narrow scope of investigation into Microsoft deal

Yahoo Finance Live discusses the rise in Activision stock due to UK regulators announcement that they've narrowed the scope of their investigation into Microsoft's purchase of Activision.

Video transcript

SEANA SMITH: With Activision shares pushing to the upside today-- you can see up just about 6%, a top trender here on Yahoo Finance-- some optimism that maybe we are a step closer to Microsoft closing its deal of its $69 billion agreement to buy the gaming company. Let's talk about exactly why that is. They could potentially be clearing at least one regulatory hurdle.

A UK regulator has narrowed the scope of its investigation into the takeover, saying that it's no longer worried about the agreement stifling console-gaming competition. Now according to the UK's Competition and Markets Authority, Microsoft has financial incentive to make "Call of Duty" available on PlayStation. Now, the initial concern was that the series could be maybe in the future exclusive to Xbox.

While this is good news, we certainly have a ways to go before this takeover gets approval here. The UK regulators still looking into the potential impact on the cloud-gaming market. And, Allie, the deal is also facing scrutiny here in the US, overseas from European-- from EU regulators. Lots of concerns about competition, this becoming a monopoly within the space. So yes, this clears one small hurdle, but there's a lot more out there.

ALEXANDRA CANAL: Absolutely. I would say this is a very partial win for Microsoft here. And especially among competitors, the biggest concern centers around "Call of Duty" and the possibility that this potential deal is going to block that distribution access to that game. Now, Microsoft has already signed distribution agreements with Nvidia, with Nintendo. It still has yet to secure something with Sony, its biggest rival.

But EU regulators did say that the investigation should be completed by the end of April. So we will have an answer at that point. But like you said, Seana, still big concerns around cloud gaming. And according to Bloomberg, there are some pretty big companies like Alphabet, for example, that is very hesitant about this potential deal. So still a lot.

DAVE BRIGGS: Sony as well. Sony has not signed on yet either. Brad Smith, the vice chair and president, said this adds to consensus to those with access to the current data that this deal creates more competition, not less.

I'm with you, though, on your first description. The Biden administration, Lina Khan's FTC, they are fighting everything in that entire area, and I believe they will continue to mount a challenge to fight that acquisition. Don't hold your breath on Lina Khan going away from that.

SEANA SMITH: Oh, I totally agree.

ALEXANDRA CANAL: Yeah, so a lot more developments there.