"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.

NEW RELEASES: This week's big new release is Nintendo's (NTDOY) "Pokemon Legends: Arceus," an action role-playing game in the popular "Pokemon" franchise. The title launched January 28 exclusively on Switch consoles. Also out this week is Sony's (SONY) "Uncharted: Legacy of Thieves Collection," a remaster of PlayStation 4 titles "Uncharted 4: A Thief's End" and "Uncharted: The Lost Legacy." The game comes out January 28 on PlayStation 5 and PC.

ACTIVISION/MICROSOFT AFTERMATH: Following last week's blockbuster announcement that Microsoft (MSFT) would acquire Activision Blizzard (ATVI) in a deal valued at $68.7B, more details began to emerge on the potential impacts of such a transaction on both companies as well as the gaming industry at large. According to Bloomberg last week, Activision Blizzard had tried to find other buyers, including Meta (MVRS), prior to the Microsoft agreement, though CEO Bobby Kotick said that the company searching for a deal had nothing to do with the harassment and discrimination claims plaguing the game maker or the pressure on him as CEO. With respect to labor, Business Insider reported that Microsoft employees had voiced concerns about the deal, with leaked messages showing that staff are worried that the deal will bring the "Call of Duty" maker's string of scandals into Microsoft's culture. On the other hand, Bloomberg's Jason Schreier said Thursday that Activision Blizzard employees experienced a wide range of emotions, with many employees expressing optimism about the deal.

Meanwhile, the Washington Post's Shannon Liao reported last week that Kotick addressed Activision Blizzard's employees at an all-hands meeting to go over the proposed takeover, during which Kotick noted that he intends to remain in his role as CEO until the deal closes and would do so for longer if necessary to ensure a smooth transition. In a video conference call, Kotick added that the "the transition is going to be smooth because committed to trying to retain as many of our people as possible," leaving some employees to become suspicious of upcoming layoffs, Liao said, citing several Activision Blizzard employees. The news came after a Wall Street Journal report saying that Kotick will depart once the takeover closes.

On the regulatory front, U.S. Representative Jerrold Nadler, a Democrat from New York, said he expects the deal to be "closely scrutinized" over antitrust concerns. "Activision Blizzard - already a gaming giant - has a pattern of bullying workers to evade accountability for rampant sexual misconduct," Nadler said in a tweet. "I expect this deal to be closely scrutinized to ensure that it won't harm American workers or competition."

Additionally, Bloomberg's Jason Schreier reported Friday that quality assurance testers at Activision unit Raven Software said they have established a union and are asking for voluntary recognition. The 34-person division, which has co-developed several games in the "Call of Duty" franchise, would be the first-ever union in the big-budget games industry in North America, according to Schreier. A spokesman for Activision Blizzard later told Bloomberg that it was "carefully reviewing the request for voluntary recognition from the CWA, which seeks to organize around three dozen of the company's nearly 10,000 employees."

SONY/ACTIVISION: Amid speculation about potential Xbox exclusivity for Activision Blizzard games, a Sony spokesman told Bloomberg last week that the company anticipates Microsoft will make sure that video games made by Activision Blizzard will continue to be available on non-Microsoft platforms if Microsoft completes its proposed takeover of the "Call of Duty" maker. "We expect that Microsoft will abide by contractual agreements and continue to ensure Activision games are multiplatform," a Sony spokesman said. Phil Spencer, head of Xbox at Microsoft, later tweeted that he had "good calls" last week with leaders at Sony in the wake of the deal announcement. "I confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation," Spencer said. "Sony is an important part of our industry, and we value our relationship."

OTHER STORIES TO WATCH:

• "Call of Duty" could move on from a yearly release schedule as a result of the Microsoft-Activision deal, according to Bloomberg [more]
• Electronic Arts (EA) and Lucasfilm Games are working on three new "Star Wars" titles [more]
• Epic Games, whose investors include Tencent (TCEHY), KKR (KKR), Disney (DIS), and Sony, asked a federal appeals court to overturn a ruling in its antitrust challenge to Apple (AAPL), Bloomberg says [more]
• Google (GOOGL) rolled out a limited beta of Google Play Games for Windows PCs, The Verge reports [more]