Will the US Antitrust prevent Microsoft from acquiring Activision by the summer?
The acquisition of Activision Blizzard by Microsoft will have to wait for the hearing wanted by the American antitrust and set later than expected. All the possible repercussions on the parts in (video) game
The new episode of the telenovela between the Federal Trade Commission , the US antitrust authority, and Microsoft on the acquisition of Activision – Blizzard will be staged on August 2nd, probably live and no longer online, after the tragicomic results of the preliminary hearing of January, which had seen the lawyers of the Redmond giant and the members of the board of directors of the software house being acquired closed out of the virtual room due to connection problems.
WILL THE FEDERAL TRADE COMMISSION RUIN MICROSOFT'S PLANS?
Thus, Microsoft's wishes to conclude quickly and bring the Call of Duty and World of Warcraft label home within the month of July of the current year fade away. In fact, we recall that in November 2022 the president of Activision Blizzard Bobby Kotick had declared in an internal email to the staff that he was confident that the acquisition by Microsoft would be concluded by June. In addition to the FTC, the European and British antitrust authorities are also investigating.
WHAT IF THE ACQUISITION DOESN'T GO THROUGH?
Microsoft, according to some media reports, despite continuing to flaunt security in public by commenting that the acquisition will take place (as regards top management, both Phil Spencer and Brad Smith have been repeating the mantra for months that the agreement will be good for the sector and also to competition), he would have told his lawyers to explore the possibilities of reaching an agreement with the Federal Trade Commission, presumably with the aim of speeding things up.
After all, it is Microsoft that risks paying the greatest price if the acquisition does not reach the goal of signing the contract: in addition to losing blockbusters of the caliber of Candy Crush, Call of Duty, World of Warcraft, Overwatch, Spyro, Hearthstone and Diablo will have to pay three billion dollars to Activision Blizzard in compensation.
Also for this reason, Microsoft is apparently changing its approach with the Federal Trade Commission. In fact, we recall that at the end of the year the House of Redmond had accused the Federal Trade Commission of violating the constitution, to be precise the fifth amendment linked to individual freedom, with its attempt to prevent the acquisition of Activision Blizzard.
If, on the other hand, the transaction goes through, the Redmond giant will become the third largest video game company in the world by revenue, behind Tencent and Sony. This is the most important operation in the history of Microsoft. The huge deal for Activision comes nearly a year after Microsoft acquired Bethesda (ZeniMax Media) for $7.5 billion. In 2014, Microsoft bought Mojang, maker of “Minecraft,” in a $2.5 billion deal.
THE (NON-VIRTUAL) CALL OF DUTY WAR
Microsoft had also reassured the US authority about the feared establishment of a monopoly, stating that "Xbox, Bethesda, Activision, Blizzard and King are just some of the hundreds of video game publishers active worldwide", reiterating then how Call of Duty it will not become exclusive to Microsoft.
It is a message made explicit several times. Exactly 11 months ago, from the columns of the official Microsoft blog, the president Brad Smith had in fact written: "to be clear, Microsoft will continue to make Call of Duty and other popular Activision Blizzard titles available on PlayStation platforms for the duration of any agreement existing with Activision. And we've engaged with Sony to make them available on PlayStation in the future beyond the existing agreement, so Sony fans can continue to enjoy the games they love. We are also interested in taking similar steps to support Nintendo's successful platforms."
For its part, the Federal Trade Commission insists on obtaining precise and detailed clarifications on the multi-platform future of Call of Duty and the other main IPs , despite the fact that Microsoft has signed a pact to bring the well-known shooter saga to Nintendo consoles for the next ten years .
Additionally, in its filing, the FTC highlighted Microsoft's record of acquisitions and using valuable gaming content to suppress competition from rival consoles, including the $7.5 billion (cash) acquisition of ZeniMax. Media, the company that owns Bethesda Softworks, production company and publisher of video games in 2020.
With control over Activision's successful franchises, it is the thesis of the US regulator, Microsoft would have both the means and the motives to harm competition by manipulating Activision's prices, degrading the quality of Activision's game or the player experience on rival gaming consoles and services, changing the terms and times of access to Activision content or rejecting content entirely from competitors, resulting in harm to consumers.
CONSUMER PROTECTION
“Microsoft has already shown that it can and will hide content from its gaming rivals,” said Holly Vedova , director of the FTC's Bureau of Competition, waging war against the Redmond giant. "Today we seek to prevent Microsoft from gaining control of a leading independent game studio and using it to harm competition in multiple fast-growing and dynamic gaming markets."
In short, the hearing before an administrative law judge in August 2023 risks being a game with very important repercussions both for Microsoft and for Activision (which could suffer significant financial repercussions if the deal vanishes) and perhaps even for the entire gaming market.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia-on-demand/lantitrust-usa-impedira-a-microsoft-di-acquisire-activision-entro-lestate/ on Thu, 12 Jan 2023 06:21:41 +0000.