Tag: activision blizzard

Microsoft vs FTC: US Court Rejects FTC’s Request to Halt Takeover of Call of Duty Maker Activision Blizzard

A US federal court on Thursday rejected the Federal Trade Commission’s (FTC) request that it order Microsoft to temporarily hold off on closing its $69 billion (roughly Rs. 5,65,480 crore) purchase of Call of Duty maker Activision Blizzard, a court filing showed.

A federal judge had previously ruled for Microsoft on Tuesday, saying the agency had failed to show the deal would be illegal under antitrust law. The FTC appealed that loss late on Wednesday, and Microsoft said it would fight that appeal.

Earlier on Thursday, the FTC asked for an order preventing the deal from closing until after the 9th US Circuit Court of Appeals ruled on a separate stay request filed with that court.

Any outstanding regulatory hurdle makes it more likely the agreement between Microsoft and Activision will expire on July 18 without the deal having been completed. After July 18, either company will be free to walk away unless they negotiate an extension.

The FTC had asked for the court to decide on the pause as soon as possible, noting that an existing temporary restraining order on the deal was meant to end just before midnight on Friday.

“We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward,” Microsoft President Brad Smith said earlier in an emailed statement.

In its motion for the pause to Judge Jacqueline Scott Corley, the FTC argued her denial of a preliminary injunction to halt the deal “raises serious, substantial issues for the Court of Appeals to resolve.”

“The FTC asks this Court to enjoin the merger at issue pending resolution of the FTC’s appeal to the Ninth Circuit Court of Appeals. The motion is denied,” the judge said in the order late on Thursday.

The FTC had said it was seeking a preliminary injunction to temporarily stop the deal until an internal FTC judge could assess it. But Corley applied the standard needed to permanently stop the deal instead, which the agency argued was inappropriate.

The FTC had also said the judge erred in assessing the deal’s effect on multi-game subscriptions and in how much credit she gave Microsoft for striking deals with rivals in order to save the proposed transaction.

To address the agency’s concerns, Microsoft had agreed to license Call of Duty to rivals, including a 10-year contract with Nintendo, contingent on the merger closing.

The deal, the largest in the history of the video game industry, was also struggling in Britain until this week. After the ruling in California, Britain’s Competition and Markets Authority, which had opposed the transaction, said a restructured deal between Microsoft and Activision Blizzard could satisfy its concerns, subject to a new investigation.

It is rare for a merger fight to go to an appeals court. That said, the FTC appealed a ruling more than 10 years ago when it lost its fight against Whole Foods’ purchase of Wild Oats. The agency settled with the companies before the appeals court made a decision.

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Microsoft-Activision Blizzard Restructured Deal Could Face Fresh Probe in UK

Britain’s competition regulator said on Wednesday a restructured deal between Microsoft and Activision Blizzard could satisfy its concerns, subject to a new investigation, a climbdown in its opposition to the biggest gaming deal in history. 

The Competition and Markets Authority (CMA) became the first regulator to block the $69 billion (nearly Rs. 5,65,750 crore) deal in April, drawing fury from the two companies, but said on Tuesday it could look again at the merger if it was restructured to address its concerns. 

That statement came less than an hour after a US court ruled that the deal to buy the Call of Duty maker could go ahead, leaving Britain’s regulator isolated. 

“Whilst merging parties don’t have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal, which can lead to a new merger investigation,” the CMA said on Wednesday.

“Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis.” 

It added that the discussions remained at an early stage and the timing of next steps would be determined in due course. 

The CMA’s decision to agree to reconsider the deal at this stage, when an appeal was imminent, has surprised advisers on the deal and many competition lawyers.

“It is really an unprecedented and dramatic turn of events,” said Alex Haffner, competition partner at UK law firm Fladgate. 

The head of Britain’s competition regulator, Sarah Cardell, had defended its decision to block the deal when she was asked by the BBC if there was any way the mega-merger could go ahead after its “final report” blocked it. 

“We have taken a decision to block the deal,” she said.

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Microsoft’s $69 Billion Takeover of Call of Duty Maker Activision Gets US Green Light, UK’s CMA Softens Stance

Microsoft cleared major hurdles to its plan to buy videogame maker Activision Blizzard on Tuesday, after a US judge gave a thumbs-up to the $69 billion (roughly Rs. 5,65,480 crore) deal and a British regulator suggested it could reconsider its opposition.

Activision shares surged 10 percent on the day, as the US and Britain have been the two countries opposed to what would be Microsoft’s biggest deal ever and the largest transaction in the videogame industry’s history. Microsoft shares rose 64 cents to $332.47 (roughly Rs. 27,425).

US District Judge Jacqueline Scott Corley in San Francisco rejected the Biden administration’s contention that the deal would hurt consumers by giving Xbox game console-maker Microsoft exclusive access to games including the best-selling Call of Duty.

Shortly after the US judge’s order, Britain’s Competition and Markets Authority (CMA) said it was prepared to consider Microsoft’s proposals to resolve antitrust concerns in the UK, suggesting the two parties may come to a resolution.

“The various testimonies that have surfaced during the US trial all weaken the UK’s antitrust watchdog’s arguments,” said Joost Van Dreunen, a lecturer at New York University’s Stern School of Business.

The US Federal Trade Commission (FTC) had argued that Microsoft would be able to use the Activision games to leave rival console makers like Nintendo and market-leader Sony Group out in the cold.

Corley disagreed in her opinion.

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” she wrote.

The court gave the FTC until Friday to appeal the decision.

FTC spokesperson Douglas Farrar said the antitrust regulator was “disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”

It is considering appealing the court decision, according to a person familiar with the matter.

The FTC did not immediately respond to a request for comment when asked about its plan to appeal the ruling.

UK decision in focus

Gaming market sales are expected to increase by 36 percent over the next four years to $321 billion (roughly Rs. 26,43,884 crore), according to a PwC estimate.

Corley’s decision is a setback in the broader push by the Biden administration to cut costs for consumers that have also included negotiations to lower the cost of insulin medication and eliminate “junk fees” in airline tickets.

Microsoft President Brad Smith said the company was grateful for the “quick and thorough” decision. He also tweeted that his focus would now be on considering how the transaction could be changed to address the CMA’s concerns.

“It does seem like the Microsoft and the CMA could work out a deal within the next couple of weeks,” said DA Davidson & Co analyst Franco Granda.

While much of the testimony in the recent trial focused on Call of Duty, Activision produces other bestsellers like World of Warcraft, Diablo and the mobile game Candy Crush Saga.

The FTC’s complaint had cited concerns about loss of competition in console gaming, as well as subscriptions and cloud gaming.

To address the agency’s concerns, Microsoft agreed to license Call of Duty to rivals, including a 10-year contract with Nintendo, contingent on the merger closing.

During the five-day trial in June, Microsoft CEO Satya Nadella argued the company would have no incentive to shut out Sony’s PlayStation or other rivals in order to sell more Microsoft Xbox consoles.

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Microsoft’s Acquisition of Activision Blizzard Likely to Lessen Competition, Says Canadian Justice Department

Canada’s Department of Justice has concluded that Microsoft’s deal to buy Call of Duty maker Activision Blizzard “is likely to” lead to less competition in some aspects of gaming, according to a court filing on Thursday.

In a letter dated Wednesday to Microsoft’s US lawyers, the department said it had communicated to Microsoft’s and Activision’s lawyers in Canada that the deal would likely lead to less competition in “gaming consoles and multigame subscription services (as well as cloud gaming).”

On Thursday, the letter was put on the docket of a US federal court proceeding in which the US Federal Trade Commission is asking a judge to temporarily stop the proposed transaction so that an FTC judge will have time to assess it. Closing arguments in the proceeding are set for later on Thursday.

Microsoft has pressed for a decision in the court fight before the July 18 termination date for the deal. A ruling could come as early as next week.

In a statement, Microsoft said it was working with antitrust enforcers to address concerns.

“We received notice from the Canada Competition Bureau that it would continue to monitor our acquisition of Activision Blizzard after the formal waiting period preventing the deal to close expired,” a Microsoft spokesperson said.

Microsoft’s bid to acquire the Call of Duty videogame maker also faces opposition from British competition authorities. Microsoft’s appeal to Britain’s Competition Appeal Tribunal is scheduled for July 28.

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Activision Blizzard to Set Up Shop in Barcelona Following EU’s Approval for Microsoft Acquisition

Activision Blizzard said its studio that developed Call of Duty would set up shop in Barcelona, putting into action its pledge to invest in Europe after Brussels approved Microsoft‘s $69 billion (nearly Rs. 5,66,000 crore) acquisition of the company in May.

The US company said on Wednesday its game developer Infinity Ward, which created the blockbuster first-person shooter game, would join its Digital Legends mobile games unit in the Spanish city.

The decision comes after Britain blocked the Microsoft takeover, prompting Activision, which has studios in Guildford and Warrington in England, to say it would “reassess” its growth plans in the country.

In contrast, it said it would “meaningfully expand” its investment and workforce in the European Union after the deal received the green light there.

Microsoft and Activision Blizzard are battling antitrust regulators on both sides of the Atlantic to clinch the deal, the biggest ever in video gaming.

Activision Blizzard CEO Bobby Kotick and his Microsoft counterpart Satya Nadella are due to testify in a court in San Francisco on Wednesday to urge a judge to allow the merger.

The Federal Trade Commission, which is seeking to block the deal, wants the transaction temporarily stopped in order to allow the agency’s in-house judge to decide the case.

Microsoft is appealing the British veto with the “aggressive” support of Activision.

The games company, which also owns the Candy Crush Saga and World of Warcraft franchises, said in April that Britain was “clearly closed for business” after the deal was blocked.

It said on Wednesday it was looking closely at the EU to enlarge its studio footprint.

“For good reason: Europe has played a key role in the evolution of gaming — particularly mobile gaming — across the globe and it’s not unreasonable to expect developers on the continent to maintain that momentum thanks to ample skills, ambition, and government support,” it said in a blog post.

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Activison Blizzard CEO Urges Federal Judge to Allow Takeover by Microsoft

The chief executive of Call of Duty maker Activision Blizzard, Bobby Kotick, went before a federal judge on Wednesday to urge her to allow his company to be bought by Microsoft for $69 billion (nearly Rs. 5,66,300 crore).

Kotick said that any effort to make Call of Duty exclusive to one platform, as Microsoft critics have said might happen, would alienate some 100 million people who play the game each month.

“You would have a revolt if you were to remove the game from one platform,” said Kotick.

He said that removing Call of Duty from PlayStation, which is made by Sony Group, would be “very detrimental” to Activision’s business.

The Federal Trade Commission has asked a judge to stop the Microsoft acquisition temporarily in order to allow the agency’s in-house judge to decide the case. In the past, the side that lost in federal court often conceded and the in-house process was scrapped.

Much of the testimony in the trial has focused on Activision’s Call of Duty, one of the best-selling videogames of all time. It is available today on smartphones, multiple consoles and on desktop computers.

Kotick said he had considered making Call of Duty available on Nintendo Switch but decided against it because he felt the console would not be a big seller. “I made a bad judgment,” he said.

Microsoft CEO Satya Nadella is scheduled to testify on Wednesday afternoon before Judge Jacqueline Scott Corley in federal court.

The FTC, which enforces antitrust law, has taken a harder line on mergers during the Biden administration. The agency says the transaction would give Microsoft, which makes the Xbox console, exclusive access to Activision games, leaving Nintendo and Sony Group out in the cold.

To address antitrust concerns, Microsoft has offered to license Call of Duty to rivals. It has also argued that it is better off financially by licensing the games to all comers.

The deal has won approval from many jurisdictions but has been opposed by the FTC in the United States and Britain’s Competition and Markets Authority.

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Microsoft Expects Next-Gen Xbox and PS6 to Launch in 2028, Claims It Has Been Losing Console Wars: Report

Microsoft believes the next generation of gaming consoles should be out in 2028, court documents in the ingoing FTC trial over the Xbox parent’s attempt to acquire Activision Blizzard revealed. The documents, as reviewed by IGN, detailed that the next Xbox and PlayStation 6 will potentially be out eight years after the current ones launched in 2020. The timeline coincides with Sony’s statement from 2022, which alluded that the next console generation won’t be here until 2027. The dates are important, considering Microsoft is trying to convince the court that it is willing to commit to making Activision’s biggest franchise Call of Duty available in parity on PlayStation consoles for a 10-year duration.

“This term would, in any case, go beyond the expected starting period of the next generation of consoles (in 2028),” Microsoft said in the documents (via IGN). “Thus, Call of Duty will be published on successor PlayStation consoles should one be released during the term of the agreement. The agreement also would ensure that Call of Duty console games are offered on PlayStation at parity with Xbox.” This contradicts Sony’s claim from November, last year, where it claimed that Microsoft only plans to offer Activision games on PlayStation until 2027. As it happens, team green had sent a draft of the 10-year agreement to Sony, but the latter has refused to respond to that offer. That duration would also exceed the 2028 release window, allowing Call of duty to flourish on Sony’s next-gen consoles. The US FTC (Federal Trade Commission) has requested to temporarily block Microsoft and Activision Blizzard from closing their $69 billion (about Rs. 5,65,921 crore) deal until the agency’s in-house court decides whether the deal hurts competition in the video game industry.

Additionally, Microsoft has now admitted that it has been losing the ‘console wars’ since 2001 i.e., since the first generation of Xbox launched. For the uninitiated, ‘console wars’ refers to the tussle between the biggest video game console manufacturers — PlayStation, Xbox, and Nintendo — for market domination, in an attempt to outsell one another. “Xbox has lost the console wars, and its rivals are positioned to continue to dominate, including by leveraging exclusive content,” Microsoft said in the documents. “Xbox’s console has consistently ranked third (of three) behind PlayStation and Nintendo in sales.” As per VGChartz, the Xbox Series S/X consoles have sold 21.3 million units since launch, whereas the PS5 and Nintendo Switch have sold about 36 million units in that period— as of April 2023. Nintendo takes the lead by a slight margin though, with 36.2 million units sold.

A Kotaku report notes that Microsoft has now given up competing in the current console wars and will instead focus on delivering quality software. This could be through games or even its subscription service Xbox Game Pass, which the company continues pushing every chance it gets. The document further goes on to stress that Xbox does not generate a profit through console sales, selling the systems at a loss in the hopes that it will make up for lost revenue through ‘sales of games and accessories.’ The company recently hiked the prices of its flagship Xbox Series X console in certain regions, and Game Pass subscription around the world.

In related news, the court hearing also revealed that Bethesda’s Indiana Jones game, which was originally planned as a multi-platform release, would now be exclusive to Xbox and PC only. The project was announced in 2021, merely months after Microsoft acquired parent company ZeniMax Media for $7.5 billion (about Rs. 61,532 crore). During the court hearing, Bethesda’s head of publishing Pete Hines revealed that ZeniMax’s original agreement with Disney would have put the Indiana Jones game on multiple consoles. However, when Microsoft acquired the former, Disney had “questions” regarding console exclusivity. Minor changes were then made to the contract, making Indiana Jones an Xbox exclusive. Even Arkane’s Redfall was originally set to release on PS5 as well, but plans for the same were scrapped following the Bethesda acquisition.

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Microsoft-Activision Blizzard Acquisition Deal Said to Get Blocked by US FTC

The US Federal Trade Commission will file an injunction blocking Microsoft‘s acquisition of Activision Blizzard, a source familiar with a planned court filing said on Monday.

Microsoft is seeking to acquire the Call of Duty videogame maker in a $69 billion (nearly Rs. 5,68,800 crore) deal.

The EU approved the Activision deal in May, but British competition authorities blocked the takeover in April.

The FTC, which enforces antitrust law, initially asked a judge to block the transaction in early December, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony Group‘s PlayStation out in the cold.

The judge overseeing the case in the Northern District of California would need to approve the order.

“We welcome the opportunity to present our case in federal court,” said Microsoft president Brad Smith in a statement.

Microsoft has said the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.

The case reflects the muscular approach to antitrust enforcement taken by the administration of US President Joe Biden. But antitrust experts say the FTC faces an uphill battle to convince a judge to block the deal, because of the voluntary concessions offered by Microsoft to allay fears it could dominate the gaming market.

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Microsoft Looking for Solutions to Get UK Approval for $69 Billion Activision Blizzard Acquisition

The president of Microsoft said he was looking for solutions to try to get British approval for the software giant’s $69 billion (nearly Rs. 5,71,730 crore) acquisition of “Call of Duty” maker Activision Blizzard.

British competition authorities blocked the biggest-ever deal in gaming in April, in a shock decision which Microsoft has since appealed. President Brad Smith said he was hopeful the outcome could change.

“I’m in search of solutions,” Microsoft President Brad Smith told the techUK Tech Policy Leadership conference in London on Tuesday.

“If regulators have concerns we want to address them. If there are problems, we want to solve them. If the UK wants to impose regulatory requirements that go beyond those in the EU, we want to find ways to fulfill them.”

He declined to comment on any meeting with the British government following the CMA’s veto on the deal which Smith had previously warned would shake confidence in the UK as a destination for tech businesses.

The EU’s competition authorities approved the deal in May after they accepted remedies put forward by Microsoft that were broadly comparable to those it proposed in the UK.

Microsoft has also appealed the US Federal Trade Commission’s action seeking to block the deal on the grounds that, the agency said, it would suppress competition.

Last month, Microsoft challenged Britain’s decision to block its takeover of Activision Blizzard on the grounds of “fundamental errors” in the assessment of Microsoft’s cloud gaming services. The company confirmed it had filed an appeal against the ruling to the Competition Appeal Tribunal (CAT).

It said the CMA’s conclusion that the deal would lead to a substantial lessening of competition in the United Kingdom’s cloud gaming market was wrong, according to the summary.

The tech giant also evaded a potential early legal obstacle in the takeover, when a US judge last month refused to allow gamers in a private suit to preliminarily block the acquisition. 

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Microsoft Challenges UK Regulator’s Decision to Block $69 Billion Takeover of Call of Duty Maker Activision

Microsoft is challenging Britain’s decision to block its $69 billion takeover of Call of Duty maker Activision Blizzard on the grounds of “fundamental errors” in the assessment of Microsoft’s cloud gaming services.

Britain’s anti-trust regulator, the Competition and Markets Authority (CMA), vetoed the deal in April, saying it could hurt competition in the nascent cloud gaming market.

Microsoft confirmed on Wednesday it had filed an appeal against the ruling to the Competition Appeal Tribunal (CAT), and a summary of its arguments was published on Friday.

It said the CMA’s conclusion that the deal would lead to a substantial lessening of competition in the United Kingdom’s cloud gaming market was wrong, according to the summary.

The CMA “made fundamental errors in its calculation and assessment of market share data for cloud gaming services”, Microsoft will say at the Competition Appeal Tribunal.

Microsoft set out five grounds for appeal in total.

The CMA’s shock decision to block the biggest ever deal in gaming drew a furious response from both companies.

Last week, Microsoft evaded a potential early legal obstacle in its $69 billion (nearly Rs. 5,71,730 crore) deal to acquire Call of Duty video game maker Activision Blizzard, when a US judge refused to allow gamers in a private suit to preliminarily block the acquisition.

The private plaintiffs sued Microsoft in California federal court in December to enjoin the deal, which they called harmful to competition.

US District Judge Jacqueline Scott Corley in San Francisco federal court said in a ruling issued late on Friday night that the video gamers had not shown they would be “irreparably harmed” if the merger were allowed to proceed before she rules on the merits of their case.

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