Tag: activision blizzard

Microsoft Wins Against Gamers Blocking Activision Blizzard Acquisition Deal

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 on Friday 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.

Microsoft and its lawyers contend the acquisition would benefit consumers.

Corley pushed back on the gamers’ allegation that Microsoft would limit availability of the game. The judge said there was no evidence Microsoft could make current versions of Call of Duty stop working after the planned merger, Corley wrote.

“The day after the merger they can play exactly the same way they played with their friends before the merger,” Corley wrote. The judge also said “it is not likely” Microsoft will make any newer version of Call of Duty exclusive to the company’s platform prior to a ruling on the merits of the deal.

A Microsoft spokesperson on Monday did not immediately respond to request for comment.

A lawyer for the gamers said on Monday they will press on with their challenge to the deal despite losing this preliminary round.

Joseph Alioto said the court concluded that a preliminary injunction “was not necessary at the moment,” but said the “evidence is very strong” that the proposed acquisition violates US antitrust law.

The court’s order comes just days after Microsoft won EU antitrust approval. The deal faces regulatory scrutiny by the US Federal Trade Commission, and also in China and South Korea.

British competition authorities rejected the deal, which would be the largest-ever in the gaming industry. Microsoft faces a May 24 deadline to appeal the decision.

US antitrust law allows private plaintiffs to sue over mergers and acquisitions.

Corley dismissed the gamers’ first lawsuit in March, ruling that plaintiffs had not offered adequate factual support for claims that the deal would violate US antitrust law.

She allowed the plaintiffs to bring an amended complaint. Microsoft’s bid to dismiss the case is pending.

© Thomson Reuters 2023
 

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Microsoft-Activision Deal Likely to Reach Final Decision in EU by May 15

EU antitrust regulators are set to approve Microsoft‘s $69 billion (nearly Rs. 5,65,480 crore) acquisition of Activision next week, with May 15 as the likeliest date, people familiar with the matter said.

The European Commission’s imminent clearance comes nearly three weeks after the UK competition authority blocked the deal, the biggest-ever deal in gaming, over concerns it would hinder competition in cloud gaming.

The EU antitrust enforcer is expected to clear the acquisition after Microsoft agreed to licensing deals with cloud streaming rivals including Nvidia, Ukraine’s Boosteroid and Japan’s Ubitus, other people with direct knowledge of the matter told Reuters in March.

It also has agreements with Nintendo and US distributor Valve, owner of the world’s largest video game distribution platform, Steam, to bring Activision’s Call of Duty to their gaming platforms should the acquisition go through.

The Commission, which has set a May 22 deadline for its decision, declined to comment.

Japan approved the takeover in March while the US Federal Trade Commission is also seeking to block it.

Meanwhile, Microsoft last month signed a 10-year deal with Nware to bring Xbox and Activision Blizzard games to the Spanish cloud-gaming platform. The decision was taken after Britain’s regulation authority decided to blocked its Activision deal.

“While it’s still early for the emerging cloud segment in gaming, this new partnership combined with our other recent commitments will make more popular games available on more cloud game streaming services than they are today,” Microsoft President Brad Smith said.

The Xbox console maker has signed similar deals with the owners of streaming platforms including Valve, Nvidia and Boosteroid.

© Thomson Reuters 2023

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‘I’m Upset With Myself’: Xbox Chief Phil Spencer Takes ‘Full Responsibility’ for Redfall Debacle

It has been a tough few days for Microsoft and Xbox. First, the firm’s ambitious and expensive attempt to acquire Call of Duty maker Activision Blizzard hit a major hurdle when Britain’s competition regulator blocked the $69 billion (roughly Rs. 5,63,980 crore) deal on April 26, citing cloud gaming concerns. And then, Redfall, Xbox’s first big tentpole exclusive of the year, released May 2 to largely negative reviews that criticised the game over its technical and creative failings. Arkane Austin’s first-person looter shooter is currently sitting at an underwhelming overall rating of 61 on OpenCritic. In the aftermath of the fallout from the botched release and the resulting fan backlash, Xbox chief Phil Spencer has come out and taken “full responsibility” for Redfall’s less than stellar reception. In a wide ranging and revealing interview late Thursday, a visibly dejected Spencer laid out his word on Xbox’s recent failures, the expectations from the community, and the road ahead. “I’m disappointed, I’m upset with myself,” the head of Xbox said on Redfall’s poor launch.

Two days after the dismal launch of Redfall, Spencer came on the Kinda Funny Xcast show and spoke candidly about the failures of Xbox’s latest exclusive. “There’s nothing that’s more difficult for me than disappointing the Xbox community,” Spencer said, adding, “…Just to watch the community lose confidence, be disappointed — I’m disappointed, I’m upset with myself.” Spencer admitted that Redfall’s critical response fell far short of internal expectations and was “not what we wanted” and also volunteered to take accountability for the game’s poor reception. “I also know these games are $70 (nearly Rs. 5,720), and I’m gonna take full responsibility for launching a game that needs to be great,” he said.

Spencer also defended Redfall Developers Arkane Austin over criticism that their latest game was perhaps an ill-advised departure from their regular slate of titles. Arkane is known for critically acclaimed single-player immersive sims like Dishonored and Prey, while Redfall is a co-op looter shooter. “There’s clearly quality and execution things that we can do, but one thing I won’t do is push against creative aspirations of our teams,” he said, adding that the studio had a proven track record, but admitting that they failed to hit “their own internal goals” on Redfall.

Spencer also weighed in on British antitrust regulator Competition and Markets Authority’s (CMA) move to block Microsoft’s takeover of Activision Blizzard and maintained that the firm intended to appeal the decision that could prevent Xbox from bringing the company’s lucrative portfolio, which includes the sales juggernaut Call of Duty franchise under its umbrella.

Later in the interview, the Xbox chief took on the so-called “console wars,” expanding upon Xbox’s position in the gaming space relative to Sony PlayStation and Nintendo. Spencer admitted that Xbox’s last-gen console, the Xbox One, failed to capture a crucial generation of gamers, most of whom were now tied to their game libraries built over the span of a console generation and thus difficult to sway toward buying an Xbox Series X or Series S. Spencer emphasised that Xbox does not intend to “out-console” Sony or Nintendo and instead focus on its unique services such as Game Pass, cloud and PC gaming.

Redfall released May 2 across PC and Xbox Series S/X and faced flak over its several technical and performance issues, while also drawing criticism for its creative and design decisions, leading to a flurry of sub-par reviews. Its cause wasn’t helped by the fact that the game launched with a 30fps cap on Xbox consoles. Spencer confirmed that Xbox, which owns Arkane-parent Bethesda, will work on improving the game and committed on delivering a 60fps patch on consoles on priority.

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Here’s What Microsoft Can Do in $69 Billion Activision Deal After UK Ban

Britain’s Competition and Markets Authority (CMA) on Wednesday blocked Microsoft’s $69 billion (nearly Rs. 5,64,100 crore) acquisition of Call of Duty maker Activision Blizzard over concerns it would hinder cloud gaming.

The ruling was a shock after the regulator had already resolved its concerns about the consoles market, a sector dominated by Sony‘s PlayStation and Microsoft‘s Xbox, which dwarfs cloud gaming.

Is the deal dead?

Not necessarily. Microsoft said it remained fully committed and would appeal.

The regulator’s decision reflected a flawed understanding of the market, it said.

How does the appeal process work?

Microsoft can appeal to Britain’s Competition Appeal Tribunal (CAT), an independent judicial body, which will only examine the CMA’s decision-making process, not the merits of the merger.

Microsoft will not be able to offer new remedies at this stage, such as offering to keep Activision content off its Xbox Game Pass, a subscription service for Xbox users, in Britain, as some analysts suggest.

“The CAT will not engage with the merits of the CMA’s decision or conduct a wholesale review of the parties’ evidence,” said Edward Lane, senior associate at law firm Harbottle & Lewis, where his particular focus is on creative industries, including film, TV, video games and music.

What’s next?

Microsoft must appeal by May 24 and a decision may take many months.

“The CAT aims to deal with ‘straightforward’ cases in under nine months – and Microsoft/Activision is anything but straightforward,” Lane, said.

What happens if Microsoft wins?

The Tribunal will return the case to the regulator for further review. Microsoft can then offer new concessions.

“The likelihood is that without a material change in circumstances or new evidence, the CMA is most likely to reach the same conclusion as it did first time around,” said James Groves, a competition associate at European law firm Fieldfisher.

What about other regulators?

European regulators will rule on the world’s biggest gaming deal by May 22. The US Federal Trade Commission filed a complaint to block the deal, which Microsoft has indicated it will fight.

If either of those blocks the deal, it could be game over, Lane said.

If the EU goes against it, Microsoft would be fighting an increasingly uphill battle and could decide to cut its losses, even if that would mean paying Activision a hefty $3 billion (nearly Rs. 2,450) break fee.

What has happened to other CMA appeals?

Facebook-owner Meta appealed a 2021 decision by the CMA to block its acquisition of Giphy, seen as a test case for the British regulator’s resolve to take on “Big Tech”.

Meta succeeded on a single procedural ground, with the decision otherwise upheld. The CMA considered new submissions, but it came to the same view and Meta had to sell animated images platform Giphy.

Global financial services company FNZ appealed a block on its 2019 merger with rival GBST. The regulator then “identified certain potential errors” in its investigation chaired by Martin Coleman, who also oversaw the Microsoft-Activision case.

The CAT sent the case back to be reconsidered, and the CMA agreed to accept a new remedy whereby FNZ could sell GBST and then buy parts of it back.

© Thomson Reuters 2023

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Microsoft Signs 10-Year Deal With Nware After UK Blocks Activision Acquisition

Microsoft said on Friday it signed a 10-year deal with Nware to bring Xbox and Activision Blizzard games to the Spanish cloud-gaming platform, days after Britain blocked its $69 billion (nearly Rs. 5,64,200 crore) buyout of the Call of Duty maker.

The agreement marks the latest effort by Microsoft to ease fears its purchase of Activision would hinder competition in cloud gaming, which was the reason cited by the Competition and Markets Authority to veto the biggest deal in gaming.

“While it’s still early for the emerging cloud segment in gaming, this new partnership combined with our other recent commitments will make more popular games available on more cloud game streaming services than they are today,” Microsoft President Brad Smith said.

The Xbox console maker, which plans to appeal CMA’s decision, has signed similar deals with the owners of streaming platforms including Valve, Nvidia and Boosteroid.

It had also offered Sony — a vocal opponent of the deal — a 10-year Call of Duty license, in line with an agreement to bring the multi-billion dollar franchise to Nintendo’s Switch.

In its decision on Wednesday, the CMA said Microsoft had an estimated 60 percent – 70 percent of global cloud gaming services as well as competitive advantages including owning Xbox, PC operating system Windows and cloud provider Azure.

The Activision deal is the biggest involving technology companies the regulator has blocked. Europe will decide on the deal by May 22. The US Federal Trade Commission is also seeking to block it.

Microsoft shares were slightly lower in US premarket trading, while those of Activision ticked up 0.2 percent.

© Thomson Reuters 2023

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Microsoft Hits Back at UK Regulator’s Decision to Block Activision Acquisition

Microsoft’s president Brad Smith said the UK regulator’s decision to prevent its acquisition of Call of Duty maker Activision Blizzard “had shaken confidence” in Britain as a destination for tech businesses.

The Competition and Markets Authority (CMA), which operates independently from government, blocked the deal on Wednesday, saying it could hit competition in the nascent cloud gaming market.

Microsoft hit back on Thursday, saying it was “probably the darkest day in our four decades in Britain” and sent the wrong message to the global tech industry about the UK.

“If the government of the United Kingdom wants to bring in investment, if it wants to create jobs (…) it needs to look hard at the role of the CMA, the regulatory structure in the United Kingdom, this transaction, and the message that the United Kingdom has just said to the world,” he told BBC radio.

A spokesman for British Prime Minister Rishi Sunak said Smith’s comments were “not borne out by the facts.”

“We continue to believe that the UK has an extremely attractive tech sector and a growing games market,” he said. “We will continue to engage proactively with Microsoft and other companies.”

Smith said Microsoft had worked effectively with regulators in Brussels but not in London, which he said refuted Britain’s claim that it would be more flexible after Brexit.

The company had answered the CMA’s questions, he said, and it had told them to come back with any more concerns. “They went silent, we heard nothing from them,” he said.

“There’s a clear message here — the European Union is a more attractive place to start a business if you want some day to sell it than the United Kingdom,” he added.

But CMA Chief Executive Sarah Cardell said the regulator’s role was to make sure Britain was a competitive environment for businesses to be able to grow and thrive.

“The decision that the CMA takes is an independent decision that we reached looking at an overall assessment of the impact of the deal on competition, and we think that is the right decision for the UK,” she said.

She noted the US Federal Trade Commission was also pressing for the deal to be blocked on competition grounds.

Microsoft said yesterday it would appeal, with “aggressive” support from Activision.

Appeals against CMA rulings are heard by the Competition Appeals Tribunal, which makes a judgment on the merits of the decision. It will not be an opportunity for Microsoft to submit new remedies.

© Thomson Reuters 2023

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Microsoft’s Licensing Offer Said to Likely Satisfy EU on Activision Deal

Microsoft’s offer of licensing deals to rivals is likely to address EU antitrust concerns over its $69 billion (nearly Rs. 5,68,000 crore) acquisition of Activision, three people familiar with the matter said, helping it to clear a major hurdle.

Microsoft announced the Activision bid in January last year, its biggest ever, to take on leaders Tencent and Sony, in the booming videogaming market and to venture in the metaverse which is virtual online worlds where people can work, play and socialise.

The European Commission, which is scheduled to decide on the deal by April 25, is not expected to demand that Microsoft sell assets to win its approval, the people said.

Activision shares spiked up 1.8 percent in pre-market trading after the Reuters’ story was published.

Microsoft President Brad Smith last month said the US software group was ready to offer rivals licensing deals to address antitrust concerns but it would not sell Activision’s lucrative Call of Duty franchise.

Smith said it was not feasible or realistic to think that one game or one slice of Activision can be carved out and separated from the rest.

The EU competition enforcer declined to comment.

Microsoft said it was “committed to offering effective  and  easily  enforceable solutions  that address the European Commission’s concerns.”

“Our commitment to grant long term 100 percent equal access to  Call of Duty to Sony, Steam,  NVIDIA and others  preserves the deal’s benefits to gamers and developers and increases competition in the market,” a Microsoft spokesperson said.

Last month, Microsoft said it had signed 10-year licensing deals with Nintendo and Nvidia that will bring Call of Duty to their gaming platforms, with the agreements conditional on a green light for the Activision deal.

The deal faces regulatory headwinds in Britain, where the UK competition agency has suggested that Microsoft divests Call of Duty to address its concerns while the US Federal Trade Commission (FTC) has asked a judge to block the deal.

© Thomson Reuters 2023

 

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Call of Duty Maker Activision Blizzard Accused of Firing Employees for Using Strong Language

Call of Duty maker Activision Blizzard has been accused by a union of illegally firing two video game testers for using “strong language” in a protest of a new company policy that limits remote work.

The Communication Workers of America (CWA) said it filed a complaint with the US National Labor Relations Board on Tuesday seeking to have the workers reinstated.

The case is the latest the union has brought to the labour board as part of a campaign to unionize the firm and its subsidiaries. Small groups of game testers at three Activision subsidiaries voted to join the CWA last year.

Microsoft is seeking to acquire Activision for $69 billion (nearly Rs. 5,68,500 crore), but US regulators have sued to block the deal.

The labour board last year issued complaints accusing Santa Monica, California-based Activision of threatening employees who posted on social media about their working conditions and withholding raises from pro-union workers, which the company denies.

Joseph Christinat, a spokesman for Activision, said the company takes appropriate disciplinary action when employees violate its workplace code of conduct.

“Using abusive, threatening or harassing language toward colleagues is unacceptable and we are disappointed that the CWA is advocating for this type of behavior,” he said.

According to the union, Activision last month announced its employees would be required to report to the office three days per week beginning in April, ending a policy that had allowed more flexible arrangements during the COVID-19 pandemic.

The change received an overwhelmingly negative response from employees, the CWA said, and Activision fired two game testers who “expressed their outrage using strong language.”

The CWA suggested the Democrat-led labor board could use the case to revisit a 2020 ruling by a Republican majority that limited legal protections for workers who use vulgar or offensive language during workplace disputes.

“When faced with unfair treatment by unscrupulous employers like Activision, workers should have the right to express themselves,” CWA Secretary-Treasurer Sara Steffens said in a statement.

© Thomson Reuters 2023

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Microsoft Seeks to Push Activision Deal at EU Hearing for Market Competition

Microsoft President Brad Smith on Tuesday will seek to convince EU antitrust regulators at a closed hearing that the US software giant’s $69 billion (nearly Rs. 5,71,800 crore) bid for Call of Duty maker Activision Blizzard will boost competition.

Smith will lead a delegation of 18 senior executives, including Microsoft Gaming Chief Executive Officer Phil Spencer, while Activision will be represented by its CEO Robert Kotick, a European Commission document seen by Reuters showed.

The hearing will allow Xbox maker Microsoft to gauge the mood among senior EU and national competition officials and European Commission lawyers ahead of the submission of remedies to address antitrust concerns.

“I think we will make clear that our acquisition of Activision Blizzard will bring more games to more people on more devices and platforms than ever before,” Smith told reporters on his way to the hearing.

Microsoft was willing to address concerns with Call of Duty licensing offers similar to the 10-year deal with Nintendo and regulatory undertakings, Smith added, without providing any further details.

Microsoft announced the Activision acquisition in January last year to take on leaders Tencent and Sony, but has run into regulatory headwinds in Europe, Britain and the United States.

Sony, which wants the deal to be blocked, sent its gaming chief Jim Ryan.

Alphabet’s Google and chip designer and computing firm Nvidia, which has a gaming business, also took part in the hearing.

“The European Commission asked for our views in the course of their inquiries into this issue. We will continue to cooperate in any processes, when requested, to ensure all views are considered,” a Google spokesperson said.

Nvidia declined to comment. The European Games Developer Federation, which has said the deal will allow Microsoft to challenge Apple, Google and Tencent, is one of the participants.

Video game distributor Valve, video game publisher Electronic Arts and the German competition watchdog and its peers in Belgium, the Czech Republic, Finland, France, Italy, Portugal, Spain and Sweden will also be taking part in the event.

© Thomson Reuters 2023

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PlayStation CEO Jim Ryan Met EU’s Antitrust Chief to Discuss Microsoft’s Activision Deal

Sony’s gaming chief Jim Ryan met EU antitrust chief Margrethe Vestager on Wednesday to discuss Microsoft’s $69 billion (about Rs. 5,62,647 crore) bid for Call of Duty maker Activision Blizzard, a person familiar with the matter said on Thursday.

The meeting came as the EU competition watchdog prepares to warn Microsoft this week about the potential anti-competitive effects of the US software giant and Xbox maker’s acquisition in the biggest gaming industry deal in history.

Microsoft is looking to Activision to help it compete better with leaders Tencent and Sony. The latter has criticised the deal and even called for a regulatory veto.

The person declined to provide details of the discussion between Ryan and Vestager. The European Commission, which is scheduled to rule on the deal by April 11, did not immediately respond to a request for comment.

The US Federal Trade Commission has sued to block the deal while UK regulators have also expressed concerns, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

An earlier report suggested that Microsoft argued that 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.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023.

The deal currently faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

© Thomson Reuters 2023

 

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