Microsoft/Activision Blizzard merger ‘likely’ to face FTC litigation, report says

Microsoft’s chances of completing its $70 billion purchase of Activision Blizzard look a little slimmer this week. Citing three sources familiar with the matter, Politico reports that the US Federal Trade Commission (FTC) will “likely” try to block the deal with an antitrust lawsuit.

The news comes as the deal also faces tough scrutiny from UK and European regulators. Governments around the world are eager to rein in the power of the big tech companies, and Microsoft’s gaming power move presents them with a big target. FTC Chair Lina Khan has been outspoken in her opposition to potential technology monopolies.

Politico’s sources say the decision has not yet been made, but that “FTC staff reviewing the deal are skeptical of the companies’ arguments.”

Meanwhile, the war of words between Sony and Microsoft over the deal took an absurd turn on Wednesday when Britain’s Competition and Markets Authority released conflicting statements the two companies had given to investigators in October. Sony is pleading with regulators to block the deal, saying Microsoft, which controls Activision Blizzard, and in particular the Call of Duty franchise, will kill competition in the games market.

Both companies were put in the unusual position of being motivated to argue that their opponents are much more successful than they are, bending over backwards to present themselves as the tough underdog.

“The suggestion that the current market leader, Sony, with clear and continuing market power, could be foreclosed by the smallest of the three console competitors, Xbox, as a result of losing access to one title is not credible,” Microsoft protested. (It has also vehemently denied it would do such a thing in the first place; Microsoft games chief Phil Spencer said Call of Duty would remain on PlayStation “as long as there’s a PlayStation out there to ship to,” while the company told the New York Times had offered Sony another 10 years of Call of Duty games.)

Microsoft also generously claimed that their own exclusive games were rubbish compared to Sony’s. “Sony has more exclusive games than Microsoft, many of which are of better quality,” it said, citing “iconic first-party franchisessuch as God of War and Uncharted. PlayStation had “almost five times as many” exclusive titles as Xbox.

Sony’s response was to trash-talk its own subscription service. “Game Pass significantly leads PlayStation Plus,” it moaned. “Microsoft already has a significant lead in multi-game subscription services. Game Pass has 29 million subscribers on the Xbox Game Pass console and Xbox Game Pass Ultimate and is expected to grow significantly in the future. Multi-game subscription levels on PlayStation Plus are lagging significantly,” it added humbly.

Sony also took pot shots at EA’s Battlefield series in passing, arguing that Call of Duty is too popular in its field to compete with if Microsoft were to make it exclusive. “Even assuming SIE had the ability and resources to develop a similarly successful franchise like Call of Duty,” Sony said, “it will take many, many years and billions of dollars to create a challenger to Call of Duty—and the example of EA’s Battlefield shows that any such effort would most likely fail.” Shots were fired!

Microsoft aims to complete its acquisition of Activision Blizzard sometime before mid-2023.

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