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

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

The news comes as the deal comes under intense scrutiny from UK and European Union regulators too. Governments around the world want to rein in the power of big tech companies, and Microsoft’s gaming power move presents them with an important goal. FTC President Lina Khan has been open in its opposition to potential technology monopolies.

Politico’s sources say the decision has yet to be made, but “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 UK regulator the Competition and Markets Authority published to hit statements the two companies had made to its investigators in October. Sony is pleading with regulators to block the deal, saying Microsoft controlling Activision Blizzard, and in particular the Call of Duty franchise, will kill competition in the games market.

Both companies have been placed in the unusual position of being motivated to claim that their opponents are far more successful than they are, and have bent over backwards to portray themselves as the scrappy underdogs.

“The suggestion that incumbent market leader Sony, with clear and enduring market power, could be foreclosed by the smallest of the console’s three competitors, Xbox, following the loss of access to a title, is not believable,” Microsoft protested. (He also strenuously denied he would do such a thing in the first place; Microsoft’s head of games Phil Spencer said Call of Duty would remain on PlayStation “as long as there is a PlayStation to ship”, while the company told the New York Times he had given Sony 10 more years of Call of Duty games.)

Microsoft also generously claimed that its own exclusive games were rubbish compared to Sony’s. “Sony has more exclusive games than Microsoft, many of which are higher quality,” he said, citing “iconic first-party franchiseslike God of War and Uncharted. PlayStation had “nearly five times more” exclusive titles than Xbox.

Sony’s response has been to denigrate its own subscription service. “Game Pass leads PlayStation Plus significantly,” it was moaning. “Microsoft already has a substantial lead in multi-game subscription services. Game Pass has 29 million Xbox Game Pass console and Xbox Game Pass Ultimate subscribers, and is expected to grow significantly in the future. PlayStation Plus multi-game subscription tiers are significantly behind,” he humbly added.

Sony also took pot shots at EA’s Battlefield series in passing, as it argued that Call of Duty is too popular in its field to compete, if Microsoft made it exclusive. “Even assuming that SIE had the capability and resources to develop a franchise similar to Call of Duty,” Sony said, “it would take many, many years and billions of dollars to create a challenger for Call of Duty – and the example of EA’s Battlefield shows that such efforts would more than likely be wasted.

Microsoft aims to complete its acquisition of Activision Blizzard at some point before mid-2023.

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